Sustainable Investments

AlphaSource Advisors uses ESG investing, the process of using environmental, social, and governance factors, to enhance returns and manage risk for investors who want to make a difference with their investment portfolio while fulfilling their fiduciary responsibilities.

Key Observations:

Companies perform better when employees are motivated.
ESG factors tend to be overlooked by most analysts so there are market inefficiencies with respect to ESG criteria.
Portfolios with high ESG ratings tend to outperform their peers.
ESG datasets show strong risk management capabilities at the firm level and at the portfolio level.  Firms with better ESG rating display substantially less downside risk of more than 200 basis points.
(Hoepner et al., 2013)

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