January 14, 2016

ESG and financial performance: aggregated evidence from more than 2000 empirical studies

In a new extensive study, Deutsche Asset Management and the
University of Hamburg investigate, whether integrating ESG into the investment
process has had a positive effect on corporate financial performance.

They analyze whether the effect was stable over time, how a link between ESG and CFP differs across regions and asset classes and whether any specific sub-category of E, S or G had a dominant influence on CFP. In this paper we highlight the main conclusions.


The search for a relation between environmental, social, and governance (ESG) criteria and corporate financial performance (CFP) can be traced back to the beginning of the 1970s. Scholars and investors have published more than 2000 empirical studies and several review studies on this relation since then.

The largest previous review study analyzes just a fraction of existing primary studies, making findings difficult to generalize. Thus, knowledge on the financial effects of ESG criteria remains fragmented. To overcome this shortcoming, this study extracts all provided primary and secondary data of previous academic review studies. Through doing this, the study combines the findings of about 2200 individual studies. Hence, this study is by far the most exhaustive overview of academic research on this topic and allows for generalizable statements. The results show that the business case for ESG investing is empirically very well founded.

Roughly 90% of studies find a nonnegative ESG–CFP relation. More importantly, the large majority of studies reports positive findings. We highlight that the positive ESG impact on CFP appears stable over time. Promising results are obtained when differentiating for portfolio and nonportfolio studies, regions, and young asset classes for ESG investing such as emerging markets, corporate bonds, and green real estate.

Graphic: Tracking the link between ESG & coprorate financial performance

Graphic: Environmental, social & governance categories and their relationship to corporate financial performance

Graphic: The link between ESG and corporate financial performance across major asset clases