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Research “Diversifying Risk and Beating the Market through ESG Evidence from Latin-America"

By Guillermina Maria Pagaza Malpica posted 12 Feb, 2023 05:19 PM


CFA Society Mexico and the initiative Think Thank of EGADE Business School of Tecnológico de Monterrey, are glad to share the first paper research “Diversifying Risk and Beating the Market through ESG Evidence from Latin-America”.

This paper examines the case of ESG investing in the Americas by analyzing the historic performance of traditional benchmarks in key financial markets and comparing them against selected ESG Indexes. The proposed framework evaluates different metrics that consider investment returns and the degree of risks taken to achieve them in order to determine whether the growing trend underlying ESG efforts provides a suitable investment alternative in the United States and Latin American equity markets. The study shows mixed evidence in the analyzed period, but it cannot be denied that markets are assigning value to the endeavor of compliance with ESG guidelines. The paper also tests for macroeconomic and investment factors that could explain ESG return spreads across countries. Full report