Study shows private investors are backing sustainability

Press release -

Research by Mary Pieterse-Bloem, ABN AMRO Investment Committee member and professor at the Erasmus School of Economics, conducted in collaboration with the Oxford Saïd Business School, has revealed that more money gets invested into companies and organisations with higher sustainability ratings. An improved rating prompts a positive response from investors – and vice versa. The findings of the study have just been released and provide systematic evidence that private investors take sustainability scores into account when making their portfolio decisions. This has never been scientifically proven before.

Based on a completely anonymised data set from ABN AMRO Private Banking, the research team assessed the degree to which investors weigh sustainability scores in their equity and bond portfolio allocations. The team also studied how investors adjusted the allocation when ratings were changed. The study reveals that they invest more in companies and organisations that rate higher on the sustainability scale. Furthermore, the researchers noted positive buying responses when ratings improved and sales when ratings were downgraded.

An organisation's sustainability rating consists of two factors: the Environmental, Social and Governance (ESG) rating assigned to government bodies and businesses, and the way organisations handle internal controversies that have gone or might go public.

The measurement period spanned January 2016 to December 2019. The study and its results have been published in an academic article and submitted to the Global Research Alliance for Sustainable Finance and Investment Conference scheduled to take place in September 2020 (http://ccsi.columbia.edu/2020/09/09/grasfi2020/).

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