The Impact of ESG Investing on Portfolio Performance and Institutional Asset Allocation Strategies
Posted: Aug 10, 2022
Abstract
The integration of Environmental, Social, and Governance (ESG) factors into investment decision-making represents one of the most significant transformations in modern finance. While traditional financial theory has historically treated ESG considerations as externalities or constraints, contemporary investment practice increasingly recognizes sustainability metrics as material factors affecting long-term value creation. This research addresses a critical gap in the literature by developing a novel computational framework that captures the dynamic, nonlinear relationships between ESG factors and financial performance. Unlike previous studies that predominantly employ linear regression models or simple screening methodologies, our approach incorporates complexity theory and network analysis to model the intricate interdependencies within ESG dimensions.
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