Sustainability & stock returns: The correlation

The price returns of Korea’s most sustainable companies since 2007 proof beyond doubt that sustainable investment is profitable, given the right research approach.

The “SolA Sustainable 50” has consistently outperformed the markets every year since inception in 2007 by margins that exclude statistical coincidence. Interestingly, the portfolio also outperformed an actively managed fund based on the SolAbility ESG research, indicating that long-term sustainable investment is a safer and more profitable investment approach or can be more in times of market volatility. The portfolio has also outperformed ESG benchmarks ( DJSI Korea and KRX SRI), indicating that sustainable investment returns depend on the quality of the research and methodology.

Remarkable developments in corporate sustainability can be observed amongst Korean companies since the first annual ESG assessment in 2007 throughout a range of criteria, including the integration in strategic corporate development in terms of research and product/service development. However, while recent signs are encouraging, the full extent of cost-savings potential and new business opportunities related to sustainable management have not yet been fully realised by most Korean companies.

For further information, please download the report

About SolAbility

SolAbility is a sustainability consultancy, providing ESG research to institutional investors and sustainable management strategy development to corporations. Two companies for which SolAbility has designed sustainability strategy and implementation roadmaps have been recognised as DJSI global sustainable super-sector leaders in 2011.

For further information, please visit our website.

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