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> isn't investing into a company with a bad ESG sub-component(s) a good idea? Yes, that is the paradox of the ESG finance trend. Using a quantitative approach
by Galanwe 3y ago
> isn't investing into a company with a bad ESG sub-component(s) a good idea?
Yes, that is the paradox of the ESG finance trend.
Using a quantitative approach, you can use the CAPM to show that at equal risk/return, increasing the cost of capital of some companies (by limiting their access to funding because of low ESG score) actually make these companies a comparatively more profitable investment (for those that disregard ESG).
If you like these kind of paradoxes based on investor ethics, have fun discovering the world of Islamic finance and how to get interests when you cannot get interests.