Interest in sustainable investing has exploded in recent years, initially focused on public equity markets, but now evolving into fixed income. We assess various aspects of sustainable investing for developed market corporate bond markets (both Investment Grade and High Yield). Using a...

To manage climate risks, investors need reliable climate exposure metrics. This need is particularly acute for climate risks along the supply chain, where such risks are recognized as important, but difficult to measure. We propose an intuitive metric that quantifies the exposure a company has...

ESG ratings firms provide information to investors, analysts, and corporate managers about the relation between corporations and non-investor stakeholders interests. Recently, ESG ratings providers have come under scrutiny over concerns of the reliability of their assessments. In this Closer...

We discuss how an investment portfolio could dramatically reduce its carbon footprint, potentially even achieving ‘net zero.’ Our central message is that very large carbon reductions are feasible but not as straightforward as some commentators suggest. The usual approach of security...

We propose a theory in which each stock's environmental, social, and governance (ESG) score plays two roles: 1) providing information about firm fundamentals and 2) affecting investor preferences. The solution to the investor's portfolio problem is characterized by an ESG-efficient frontier,...

We investigate two popular approaches to long-only style investing that are often considered as potential starting points for smart beta investors: the “portfolio mix” that builds a style portfolio from standalone style portfolios and the “integrated portfolio” that integrates styles...