Impact of Sustainability on Investment Returns
Location
Parker College of Business
Document Type and Release Option
Thesis Presentation (Archived)
Faculty Mentor
Dr. Bill Wells
Faculty Mentor Email
wwells@georgiasouthern.edu
Presentation Year
2020
Start Date
30-11-2020 12:00 AM
End Date
30-11-2020 12:00 AM
Keywords
Georgia Southern University, Honors Program, Virtual Symposium, Oluwatise Ifidon
Description
Over the years, energy policies and regulations have been created on a nationwide level for the efficient use of energy (UE), renewable energy sources (RES) and related CO2 reductions. Within recent years, a burgeoning number of voices have emphasized the importance of incorporating sustainability into investment portfolio construction. Sustainability is the doctrine of ensuring that short-term actions do not limit the range of long-term economic, social and environmental options. Co-integrating the realities of the present with the possibilities of the future. This leads to the viable questions: Is sustainability a viable measure in portfolio construction? Do sustainable portfolios outperform or underperform conventional portfolios? Policy advances and technological innovations are coming together and accelerating the transition to a low-carbon economy – a society more productive and less dependent or independent of carbon dioxide (CO2) emissions in the creation of goods and services.
An observational analysis is first performed using historical price data from the 1900 Dow Jones Sustainability Group Index (DJSGI) and the S&P 500 returns from 1999- 2000, to show the superior performance of the less carbon-intensive companies in the North American region market, which supplements evidence from existing literature in the market's unfavorable pricing of companies that increase climate change risk. Daily closing prices of all the companies and the benchmark indices (S&P 500) are taken for a twenty-year period of January 1999– December 2019. The results indicate that there is difference in the performance between sustainable portfolio and the traditional conventional indices.
Academic Unit
Parker College of Business
Impact of Sustainability on Investment Returns
Parker College of Business
Over the years, energy policies and regulations have been created on a nationwide level for the efficient use of energy (UE), renewable energy sources (RES) and related CO2 reductions. Within recent years, a burgeoning number of voices have emphasized the importance of incorporating sustainability into investment portfolio construction. Sustainability is the doctrine of ensuring that short-term actions do not limit the range of long-term economic, social and environmental options. Co-integrating the realities of the present with the possibilities of the future. This leads to the viable questions: Is sustainability a viable measure in portfolio construction? Do sustainable portfolios outperform or underperform conventional portfolios? Policy advances and technological innovations are coming together and accelerating the transition to a low-carbon economy – a society more productive and less dependent or independent of carbon dioxide (CO2) emissions in the creation of goods and services.
An observational analysis is first performed using historical price data from the 1900 Dow Jones Sustainability Group Index (DJSGI) and the S&P 500 returns from 1999- 2000, to show the superior performance of the less carbon-intensive companies in the North American region market, which supplements evidence from existing literature in the market's unfavorable pricing of companies that increase climate change risk. Daily closing prices of all the companies and the benchmark indices (S&P 500) are taken for a twenty-year period of January 1999– December 2019. The results indicate that there is difference in the performance between sustainable portfolio and the traditional conventional indices.
Comments
A presentation of “Impact of Sustainability on Investment Returns” by Oluwatise Ifidon at the Georgia Southern University Honors Program Fall 2020 Virtual Honors Symposium. Oluwatise is a graduating senior with a double major in Finance and Modern Languages and was mentored by Bill Wells. For more information about Honors at Georgia Southern see https://georgiasouthern.edu/honors.