The Value of ESG Metrics in the Investment Process
Leveraging ESG Metrics in the Construction of European Stock Portfolios
- 2025
- Book
- Author
- Alexander Schleipfer
- Publisher
- Springer Fachmedien Wiesbaden
About this book
Improving data availability is not merely enough to ensure superior decision-making. The value of data depends on its quality, comparability, and relevance. In the context of environmental, social, and governance (ESG) metrics, European regulations have strengthened data quality and comparability by enhancing transparency and standardization, but their relevance to capital allocation remains contested. However, investors striving for financial returns have begun to question whether ESG metrics can consistently drive risk-adjusted performance and competitive returns. This study traces the evolution of ESG investing and evaluates the explanatory power of Combined ESG Scores and Ratings, alongside their underlying metrics, for portfolio construction in asset management. Building on these findings, the ESG-F model provides a pragmatic pre-selection layer that turns ESG data into implementable selection criteria, enabling risk mitigation and opportunity capture.
Table of Contents
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Frontmatter
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Chapter 1. Introduction and Statement
Alexander SchleipferAbstractIn recent years, capital market activity has been frenzied, with low interest rates, extensive fiscal support during the COVID-19 pandemic, and a resounding call for investors and asset managers to consider environmental, social, and governance (ESG) factors. However, as the macroeconomic environment has tightened, production and product prices have risen, and more critical debates on ESG investing have emerged. While some argue that this investment strategy drives up costs, contributes to higher prices, and diminishes investment returns, others maintain that incorporating ESG factors enhances investment returns. -
Chapter 2. Theoretical Background and Hypothesis Development
Alexander SchleipferAbstractThere is no agreed-upon definition of ESG investing. However, there are many terms used in the literature connected to the idea of “socially responsible investing” (SRI), including “ethical investing,” “green investing,” and “ESG investing.” In the following two subsections, I consider how ESG investing is understood in the literature and how it can be distinguished from other concepts. -
Chapter 3. Methodology and Data Analysis
Alexander SchleipferAbstractAs in Sect. 2.3.3, the statistical analyses were conducted using the R programming language (version 4.2.2), its graphical user interface RStudio (version 2023.12.1, build 402), and various R libraries. Straightforward calculations and basic data organization were performed using Microsoft Excel. The data collection process was carried out using Refinitiv Eikon, which offers multiple ESG metrics. -
Chapter 4. Summary and Implementable Model for Practical Applications
Alexander SchleipferAbstractIn Chap. 2 of this dissertation, it became evident that there is no consensus definition of ESG investing, and this fact is underscored by the diversity of ESG investors. Consequently, the statement that ESG investing comes at the cost of returns is refutable. -
Backmatter
- Title
- The Value of ESG Metrics in the Investment Process
- Author
-
Alexander Schleipfer
- Copyright Year
- 2025
- Publisher
- Springer Fachmedien Wiesbaden
- Electronic ISBN
- 978-3-658-49789-7
- Print ISBN
- 978-3-658-49788-0
- DOI
- https://doi.org/10.1007/978-3-658-49789-7
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