Historically, ESG indices have not attracted asset volumes comparable to smart beta index strategies. This could be attributed to the fact that market participants and academics alike have struggled to link ESG-based strategies with financial performance.
As researchers shift their focus from how to study ESG to how to integrate ESG data into products and indices, two key issues related with integrating ESG data have come to light that may be the reason some market participants investors have held back from taking the plunge.
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