Fuzzy data stalls ESG alpha hunt

Quants searching for ESG signals have reached very different conclusions. Mostly they blame the data

Quant investors who wield powerful but hard-to-understand models are used to dealing with sticky questions about cause and effect. It’s no different with ESG investing.

Experts are divided about whether screening investments by environmental, social and governance criteria influences returns. And if they see a link, they can’t always tell whether it’s coincidental or contributory.

Axa Investment Managers has found a “direct link” between board diversity and “a sustainable competitive advantage