Demystifying Responsible Investment Performance: A Review of Key Academic and Broker Research on ESG Factors

This document presents a review of key academic and broker research examining the impact of environmental, social, and governance (ESG) factors on investment performance. Jointly authored by the UNEP Finance Initiative’s Asset Management Working Group and Mercer, it aims to dismantle persistent myths surrounding responsible investment. Through the analysis of 20 academic studies and 10 broker reports, the document evaluates the materiality of ESG criteria across diverse markets, methodologies, and timeframes. The findings show that ESG integration does not inherently compromise financial returns and can, in some cases, enhance them. The report highlights the evolution from exclusion-based screening to more sophisticated ESG integration strategies, discusses the growing importance of ESG in fiduciary duty, and offers insights into performance correlations, data quality challenges, and long-term investment outlooks.