Final Project

Topic: Does integrating ESG criteria into investment strategies result in better financial performance compared to traditional investment strategies?

Data:

ESG Scores and Databases: Utilize databases that provide ESG scores for companies, such as MSCI ESG Research, Sustainalytics, or the Bloomberg ESG Data Service. These scores will be critical in categorizing companies based on their ESG compliance levels.

Financial Performance Data: Collect financial data from sources like Bloomberg, Yahoo Finance, or Morningstar. Key financial metrics could include return on equity (ROE), return on assets (ROA), stock performance, and profit margins.

Sustainability Reports: Many companies publish annual sustainability or corporate social responsibility (CSR) reports that detail their ESG efforts. These can provide qualitative insights to supplement quantitative data.

Academic and Research Databases: Platforms like JSTOR or Google Scholar can offer access to existing research on the correlation between ESG criteria and financial performance, helping to frame your analysis within the current academic discourse.

Data Analysis:

Comparative Performance Analysis: Compare the financial performance of high ESG score companies against low ESG score companies using metrics such as stock price performance, ROE, and profit margins over a defined period.

Sector-wise Analysis: Perform a sector-wise comparison to identify if the impact of ESG integration varies across different industries.

Regression Analysis: Use regression models to determine the strength and significance of the relationship between ESG scores and financial performance metrics, controlling for other variables like company size and market sector.

Risk Assessment: Analyze the volatility and risk profiles of ESG-integrated portfolios versus traditional portfolios to assess if ESG criteria contribute to financial stability.

Audience: Investment Firms and Asset Managers, Academic Institutions and Research Bodies