COMPANIES that focus on environmental and sustainability polices are more likely to receive a higher share price performance, according to a new study released by The University of Oxford’s Smith School of Enterprise and the Environment and Arabesque Asset Management.
The report investigated more than 190 academic studies, industry reports, newspaper articles and other literature to find that corporate sustainability helps to lower a company’s cost of capital and ultimately boost the stock price performance.
In addition the new report also found that 88% of environmental, social and governance practices result in better operational performance of firms.
A key highlight from the findings was the suggestions by authors that, “it is in the best interest of investors and corporate managers to incorporate sustainability considerations into their decision making processes.”
Andreas Feiner from Arabesque Asset Management also said: "Based on the growing trend that we are seeing of sustainability entering the corporate mainstream, we believe that the most successful future investors will be those with continuous research programmes that analyze a range of ESG (environmental, social and governance) factors. Sustainability and profitability can go hand in hand."