Domestic ESG-focused firms performed better than global peers: RBI

Large listed domestic companies with an active ESG (environmental, social and governance) framework have performed better than their broad market counterparts even during extreme market events like the pandemic shocks, says an RBI study.

The RBI study of 18 economies with such frameworks, indicate that investors reward pro-climate and pro-socially oriented companies.

The analysis is based on the 10 emerging countries of Brazil, China, India, Indonesia, South Korea, Malaysia, Russia, South Africa, Taiwan, and Thailand; and the eight advanced economies of Australia, Britain, Canada, Hong Kong, Japan, Sweden, Switzerland, and the US.

The ESG study based on the Morgan Stanley Capital International (MSCI's) ESG indices is published in the February bulletin of the Reserve Bank.

The study noted that the ESG leaders' indices have outperformed the broad indices for most of the countries in the sample, and the outcomes are based on these numbers from 2010 when the ESG concept began to gather