Business

Doing well by doing good with the performance of United Nations Global Compact Climate Change Champions

M. Msiska, A. Ng, et al.

This groundbreaking study by Moses Msiska, Alex Ng, and Randall K. Kimmel reveals the positive long-term impact of investing in UN Global Compact Climate Change Champions. With reduced risk and volatility, it challenges conventional asset pricing assumptions about climate change. Discover how 'doing good' can also mean 'doing well' in business!

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Playback language: English

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Abstract

This study investigates the portfolio performance of UN Global Compact (UNGC) Climate Change Champions (CCC), representing a fourth-generation SRI screening strategy. The research finds a positive long-term effect on portfolio performance after firms join the UNGC, with lower volatility and risk compared to competitors. This suggests a potential market mispricing of lower risk, implying standard asset pricing models may not fully account for investor aversion to climate change risk and preference for firms actively combating it. The study concludes that investing in UNGC-CCC firms carries no underperformance penalty, supporting the notion that 'doing good is good for business'.

Publisher

Humanities and Social Sciences Communications

Published On

Dec 10, 2021

Authors

Moses Msiska, Alex Ng, Randall K. Kimmel

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