Year: 2025
Type: article
Abstract: In light of the growing interest in sustainable finance among investors and academics, in this study, we present an empirical analysis designed to understand whether sustainable investments outperform, underperform, or perform neutrally relative to conventional investments. The literature presents a spectrum of often-opposed conclusions, precluding the establishment of a definitive, consensus-driven judgment. Therefore, our analysis examines the behavior of sustainable investments within the Eurozone equity market from January 2019 to December 2023. Twenty portfolios are constructed to simulate sustainable investment strategies differentiated by environmental, social, and governance (ESG) strategy; stock inclusion/exclusion thresholds; and the type of ESG rating employed in the selection process. The analysis reveals that sustainable investments do not statistically significantly outperform or underperform traditional investments. This finding is significant for investors committed to ESG principles, as it suggests that they can align their investment choices with their ethical convictions without sacrificing performance.
DOI: 10.3390/ijfs13040230
Authors: Guido Abate, Ignazio Basile, Pierpaolo Ferrari
Institutions: University of Brescia, Bocconi University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,172
OpenAlex ID: W4416940753