Assessing Risk through Environmental, Social and Governance Exposures

Jeff Dunn, Shaun Fitzgibbons, Lukasz Pomorski

2018 | Practitioner | Portfolio Construction, Risk & Performance

Overall, our findings suggest that ESG may have a role in investment portfolios that extends beyond ethical considerations, particularly for investors interested in tilting toward safer stocks. ESG exposures may inform investors about the riskiness of the securities in a way that is complementary to what is captured by traditional statistical risk models.