SAM/Robeco research finds positive relationship between sustainability and financial performance

New ‘Alpha from Sustainability’ white paper

New research from sustainable investment boutique SAM and its parent firm Robeco has found a positive relationship between sustainability and financial performance.

The Alpha from Sustainability white paper presents the results of an empirical study by Robeco’s Quantitative Strategies Department based on SAM’s proprietary corporate sustainability database.

“The results reveal a positive relationship between sustainability and financial performance, as measured by stock returns, demonstrating the superior alpha [outperformance] potential of the sustainability leaders identified by SAM’s sustainability data,” SAM states.

“This is reflected in the positive information ratio (0.53) of the portfolio of sustainability leaders.”
The 12-page study found that the performance of aposited long/short strategy was exceptional during crisis and post-crisis periods, “suggesting that sustainability optimal portfolios inherently have better risk characteristics”.

“Overall, the findings of this research provide us with credible evidence that firms that adopt corporate sustainability best practices are not contradicting or neglecting their primary objective, which is to maximize the profits of their shareholders,” the Swiss-based firm adds.

Meanwhile, SAM has also published its second study on the global Clean Tech private equity market. Clean Tech Private Equity: Past, Present and Future points to a “renewed growth spurt that investors can exploit through targeted investments”. The sector appears ready to continue generating above-average growth, SAM says.