Does Sustainability Generate Better Financial Performance? Review, Meta-analysis, and Propositions

ArXiv ID: ssrn-3708495 “View on arXiv”

Authors: Unknown

Abstract

Sustainability in business and ESG (environmental, social, and governance) in finance have exploded in popularity among researchers and practitioners. We survey

Keywords: ESG (Environmental, Social, and Governance), Sustainable Finance, Asset Pricing, Portfolio Management, Literature Review, Multi-Asset

Complexity vs Empirical Score

• Math Complexity: 3.5/10
• Empirical Rigor: 8.0/10
• Quadrant: Street Traders
• Why: The paper relies on large-scale meta-analysis of existing studies rather than novel mathematical modeling, yet demonstrates high empirical rigor through systematic review of 1,141 papers and providing public replication data and methodology.

  flowchart TD
    A["Research Goal:<br>Does Sustainability Improve Financial Performance?"]
    B["Methodology:<br>Systematic Review & Meta-Analysis"]
    C["Data Inputs:<br>Existing Studies on ESG & Returns"]
    D["Computational Process:<br>Aggregation & Bias Correction"]
    E["Outcome 1: Positive<br>ESG-Return Relationship"]
    F["Outcome 2: Risk-Based<br>Explanations Dominate"]
    G["Proposition:<br>ESG as Risk Factor in Asset Pricing"]

    A --> B
    B --> C
    C --> D
    D --> E
    D --> F
    E & F --> G