Research Summary

The Relationship between ESG and Long-term Financial Performance

by George Serafeim


Environmental, social and governance (ESG) issues are increasingly viewed as material for corporate performance. This research project seeks to identify the nature of the relationship between ESG and financial performance, the conditions under which this relationship is negative, neutral or positive, and the critical role of innovation in extending the "performance frontier."

Keywords: sustainability; investment management; innovation; capital markets; corporate culture; tradeoffs; transparency; product development; business model innovation; valuation; value creation;