Will the DAX 50 ESG Establish the Standard for German Sustainable Investments? A Sustainability and Financial Performance Analysis
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Will the DAX 50 ESG Establish the Standard for German Sustainable Investments? A Sustainability and Financial Performance Analysis
Credit and Capital Markets – Kredit und Kapital, Vol. 53 (2020), Iss. 4 : pp. 461–491
2 Citations (CrossRef)
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Martin Nerlinger, University of Augsburg, Faculty of Business Administration and Economics, Chair of Finance and Banking, Universitaetsstrasse 16, 86159 Augsburg, Germany, Tel.: +49 821 598 4479.
Cited By
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Sustainable Finance and ESG Importance: A Systematic Literature Review and Research Agenda
Zairis, Georgios | Liargovas, Panagiotis | Apostolopoulos, NikolaosSustainability, Vol. 16 (2024), Iss. 7 P.2878
https://doi.org/10.3390/su16072878 [Citations: 2] -
A Systematic Literature Review on ESG during the COVID-19 Pandemic
Savio, Riccardo | D’Andrassi, Edoardo | Ventimiglia, FrancescaSustainability, Vol. 15 (2023), Iss. 3 P.2020
https://doi.org/10.3390/su15032020 [Citations: 17]
References
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Albuquerque, R. A./Koskinen, Y. J./Yang, S./Zhang, C. (2020): Resiliency of Environmental and Social Stocks: An Analysis of the Exogenous COVID-19 Market Crash. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3583611.
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Google Scholar -
Alsaifi, K./Elnahass, M./Salama, A. (2020): Market responses to firms’ voluntary carbon disclosure: Empirical evidence from the United Kingdom. Journal of Cleaner Production, 262, 121377. https://doi.org/10.1016/j.jclepro.2020.121377.
Google Scholar -
Amel-Zadeh, A./Serafeim, G. (2018): Why and How Investors Use ESG Information: Evidence from a Global Survey. Financial Analysts Journal, Vol. 74(3), 87–103. https://doi.org/10.2469/faj.v74.n3.2.
Google Scholar -
Ammann, M./Bauer, C./Fischer, S./Müller, P. (2019): The impact of the Morningstar Sustainability Rating on mutual fund flows. European Financial Management, Vol. 25(3), 520–553. https://doi.org/10.1111/eufm.12181.
Google Scholar -
Attig, N./El Ghoul, S./Guedhami, O./Suh, J. (2013): Corporate Social Responsibility and Credit Ratings. Journal of Business Ethics, Vol. 117(4), 679–694. https://doi.org/10.1007/s10551-013-1714-2.
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Barber, B./Morse, A./Yasuda, A. (2019): Impact Investing. Working Paper. Advance online publication. https://doi.org/10.3386/w26582.
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Barnett, M. L./Salomon, R. M. (2012): Does it pay to be really good? addressing the shape of the relationship between social and financial performance. Strategic Management Journal, Vol. 33(11), 1304–1320. https://doi.org/10.1002/smj.1980.
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Betti, G./Consolandi, C./Eccles, R. G. (2018): The Relationship between Investor Materiality and the Sustainable Development Goals: A Methodological Framework. Sustainability, Vol. 10(7), 2248. https://doi.org/10.3390/su10072248.
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Bianchi, R. J./Drew, M. E. (2012): Sustainable stock indices and long-term portfolio decisions. Journal of Sustainable Finance & Investment, Vol. 2(3-4), 303–317.
Google Scholar -
Boehmer, E./Masumeci, J./Poulsen, A. B. (1991): Event-study methodology under conditions of event-induced variance. Journal of Financial Economics, Vol. 30(2), 253–272. https://doi.org/10.1016/0304-405X(91)90032-F.
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Busch, T./Johnson, M./Pioch, T./Kopp, M. (2018): Consistency of Corporate Carbon Emission Data.
Google Scholar -
Carhart, M. M. (1997): On Persistence in Mutual Fund Performance. The Journal of Finance, Vol. 52(1), 57–82. https://doi.org/10.1111/j.1540-6261.1997.tb03808.x.
Google Scholar -
Carolina Rezende de Carvalho Ferreira, M./Amorim Sobreiro, V./Kimura, H./Luiz de Moraes Barboza, F. (2016): A systematic review of literature about finance and sustainability. Journal of Sustainable Finance & Investment, Vol. 6(2), 112–147. https://doi.org/10.1080/20430795.2016.1177438.
Google Scholar -
Ceccarelli, M./Ramelli, S./Wagner, A. F. (2020): Low-carbon Mutual Funds. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3353239.
Google Scholar -
Chatterji, A. K./Durand, R./Levine, D. I./Touboul, S. (2016). Do ratings of firms converge? Implications for managers, investors and strategy researchers. Strategic Management Journal, Vol. 37(8), 1597–1614. https://doi.org/10.1002/smj.2407.
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Christensen, D./Serafeim, G./Sikochi, A. (2019): Why is Corporate Virtue in The Eye of The Beholder? The Case of ESG Ratings. Working Paper.
Google Scholar -
De Haan, M./Dam, L./Scholtens, Bert (2012): The drivers of the relationship between corporate environmental performance and stock market returns. Journal of Sustainable Finance & Investment, Vol. 2(3–4), 338–375.
Google Scholar -
Eccles, R. G./Stroehle, J. (2018): Exploring Social Origins in the Construction of ESG Measures. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3212685.
Google Scholar -
Edmans, A. (2011): Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics, Vol. 101(3), 621–640. https://doi.org/10.1016/j.jfineco.2011.03.021.
Google Scholar -
Fatemi, A./Fooladi, I./Tehranian, H. (2015): Valuation effects of corporate social responsibility. Journal of Banking & Finance, Vol. 59, 182–192. https://doi.org/10.1016/j.jbankfin.2015.04.028.
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Google Scholar -
Friede, G./Busch, T./Bassen, A. (2015): ESG and financial performance: aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, Vol. 5(4), 210–233. https://doi.org/10.1080/20430795.2015.1118917.
Google Scholar -
Friedman, M. (2002): Capitalism and freedom: University of Chicago press.
Google Scholar -
Gibson, R./Krueger, P./Riand, N./Schmidt, P. S. (2019): ESG rating disagreement and stock returns. Working Paper.
Google Scholar -
Görgen, M./Jacob, A./Nerlinger, M. (2021): Get green or die trying? Carbon risk integration into portfolio management. The Journal of Portfolio Management, forthcoming.
Google Scholar -
Görgen, M./Jacob, A./Nerlinger, M./Riordan, R./Rohleder, M./Wilkens, M. (2020): Carbon Risk. Working Paper.
Google Scholar -
Grewal, J./Riedl, E. J./Serafeim, G. (2019): Market Reaction to Mandatory Nonfinancial Disclosure. Management Science, Vol. 65(7), 3061–3084. https://doi.org/10.1287/mnsc.2018.3099.
Google Scholar -
Hartzmark, S. M./Sussman, A. B. (2019): Do Investors Value Sustainability? A Natural Experiment Examining Ranking and Fund Flows. The Journal of Finance, Vol. 74(6), 2789–2837. https://doi.org/10.1111/jofi.12841.
Google Scholar -
Horváthová, E. (2010): Does environmental performance affect financial performance? A meta-analysis. Ecological Economics, Vol. 70(1), 52–59. https://doi.org/10.1016/j.ecolecon.2010.04.004.
Google Scholar -
Hussain, N./Rigoni, U./Cavezzali, E. (2018): Does it pay to be sustainable? Looking inside the black box of the relationship between sustainability performance and financial performance. Corporate Social Responsibility and Environmental Management, Vol. 25(6), 1198–1211. https://doi.org/10.1002/csr.1631.
Google Scholar -
Keele, D. M./DeHart, S. (2011): Partners of USEPA Climate Leaders: an Event Study on Stock Performance. Business Strategy and the Environment, Vol. 20(8), 485–497. https://doi.org/10.1002/bse.704.
Google Scholar -
Kolari, J. W./Pynnönen, S. (2010): Event Study Testing with Cross-sectional Correlation of Abnormal Returns. Review of Financial Studies, Vol. 23(11), 3996–4025. https://doi.org/10.1093/rfs/hhq072.
Google Scholar -
Kothari, S. P./Warner, J. B. (2007): Chapter 1 – Econometrics of Event Studies. In Handbook of Empirical Corporate Finance : Handbooks in Finance (pp. 3–36). San Diego: Elsevier. https://doi.org/10.1016/B978-0-444-53265-7.50015-9.
Google Scholar -
Kotsantonis, S./Serafeim, G. (2019): Four Things No One Will Tell You About ESG Data. Journal of Applied Corporate Finance, Vol. 31(2), 50–58. https://doi.org/10.1111/jacf.12346.
Google Scholar -
Krueger, P. (2015): Corporate goodness and shareholder wealth. Journal of Financial Economics, Vol. 115(2), 304–329. https://doi.org/10.1016/j.jfineco.2014.09.008.
Google Scholar -
Li, F./Polychronopoulos, A. (2020): What a Difference an ESG Ratings Provider Makes!
Google Scholar -
López, M. V./Garcia, A./Rodriguez, L. (2007): Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index. Journal of Business Ethics, Vol. 75(3), 285–300. https://doi.org/10.1007/s10551-006-9253-8.
Google Scholar -
Love, I. (2011): Corporate Governance and Performance around the World: What We Know and What We Don’t. The World Bank Research Observer, Vol. 26(1), 42–70. https://doi.org/10.1093/wbro/lkp030.
Google Scholar -
Matsumura, E. M./Prakash, R./Vera-Muñoz, S. C. (2014): Firm-Value Effects of Carbon Emissions and Carbon Disclosures. The Accounting Review, Vol. 89(2), 695–724. https://doi.org/10.2308/accr-50629.
Google Scholar -
Molina-Azorín, J. F./Claver-Cortés, E./López-Gamero, M. D./Tarí, J. J. (2009): Green management and financial performance: a literature review. Management Decision, Vol. 47(7), 1080–1100. https://doi.org/10.1108/00251740910978313.
Google Scholar -
Monk, A. H. B./Prins, M./Rook, D. (2019): Data Defense in Sustainable Investing. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3474072.
Google Scholar -
Oberndorfer, U./Schmidt, P./Wagner, M./Ziegler, A. (2013): Does the stock market value the inclusion in a sustainability stock index? An event study analysis for German firms. Journal of Environmental Economics and Management, Vol. 66(3), 497–509. https://doi.org/10.1016/j.jeem.2013.04.005.
Google Scholar -
Porter, M. E. (1991): America s green strategy. Reader in Business and the Environment, 33.
Google Scholar -
Porter, M. E./van der Linde, C. (1995): Toward a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Perspectives, Vol. 9(4), 97–118. https://doi.org/10.1257/jep.9.4.97.
Google Scholar -
PRI (2019). Principles for Responsible Investment Annual Report.
Google Scholar -
Qontigo (2020). DAX® 50 ESG – The New Standard in German ESG Investing.
Google Scholar -
Ramelli, S./Wagner, A. F. (2020): Feverish Stock Price Reactions to COVID-19. Working Paper.
Google Scholar -
Ramiah, V./Martin, B./Moosa, I. (2013): How does the stock market react to the announcement of green policies? Journal of Banking & Finance, Vol. 37(5), 1747–1758. https://doi.org/10.1016/j.jbankfin.2013.01.012.
Google Scholar -
Revelli, C./Viviani, J.-L. (2015): Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis. Business Ethics: A European Review, Vol. 24(2), 158–185. https://doi.org/10.1111/beer.12076.
Google Scholar -
Scherer, L./Behrens, P./Koning, A. de/Heijungs, R./Sprecher, B./Tukker, A. (2018): Trade-offs between social and environmental Sustainable Development Goals. Environmental Science & Policy, Vol. 90, 65–72. https://doi.org/10.1016/j.envsci.2018.10.002.
Google Scholar -
Schramade, W. (2017): Investing in the UN Sustainable Development Goals: Opportunities for Companies and Investors. Journal of Applied Corporate Finance, Vol. 29(2), 87–99. https://doi.org/10.1111/jacf.12236.
Google Scholar -
Walley, N./Whitehead, B. (1994): It’s not easy being green. Reader in Business and the Environment, Vol. 36(81).
Google Scholar -
Zerbib, O. D. (2019): The effect of pro-environmental preferences on bond prices: Evidence from green bonds. Journal of Banking & Finance, Vol. 98, 39–60. https://doi.org/10.1016/j.jbankfin.2018.10.012.
Google Scholar -
Albuquerque, R. A./Koskinen, Y. J./Yang, S./Zhang, C. (2020): Resiliency of Environmental and Social Stocks: An Analysis of the Exogenous COVID-19 Market Crash. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3583611.
Google Scholar -
Alessandrini, F./Jondeau, E. (2020): ESG Investing: From Sin Stocks to Smart Beta. The Journal of Portfolio Management, Vol. 46(3), 75–94. https://doi.org/10.3905/jpm.2020.46.3.075.
Google Scholar -
Alsaifi, K./Elnahass, M./Salama, A. (2020): Market responses to firms’ voluntary carbon disclosure: Empirical evidence from the United Kingdom. Journal of Cleaner Production, 262, 121377. https://doi.org/10.1016/j.jclepro.2020.121377.
Google Scholar -
Amel-Zadeh, A./Serafeim, G. (2018): Why and How Investors Use ESG Information: Evidence from a Global Survey. Financial Analysts Journal, Vol. 74(3), 87–103. https://doi.org/10.2469/faj.v74.n3.2.
Google Scholar -
Ammann, M./Bauer, C./Fischer, S./Müller, P. (2019): The impact of the Morningstar Sustainability Rating on mutual fund flows. European Financial Management, Vol. 25(3), 520–553. https://doi.org/10.1111/eufm.12181.
Google Scholar -
Attig, N./El Ghoul, S./Guedhami, O./Suh, J. (2013): Corporate Social Responsibility and Credit Ratings. Journal of Business Ethics, Vol. 117(4), 679–694. https://doi.org/10.1007/s10551-013-1714-2.
Google Scholar -
Barber, B./Morse, A./Yasuda, A. (2019): Impact Investing. Working Paper. Advance online publication. https://doi.org/10.3386/w26582.
Google Scholar -
Barnett, M. L./Salomon, R. M. (2012): Does it pay to be really good? addressing the shape of the relationship between social and financial performance. Strategic Management Journal, Vol. 33(11), 1304–1320. https://doi.org/10.1002/smj.1980.
Google Scholar -
Bauer, R./Ruof, T./Smeets, P. (2019): Get Real! Individuals Prefer More Sustainable Investments. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3287430.
Google Scholar -
Betti, G./Consolandi, C./Eccles, R. G. (2018): The Relationship between Investor Materiality and the Sustainable Development Goals: A Methodological Framework. Sustainability, Vol. 10(7), 2248. https://doi.org/10.3390/su10072248.
Google Scholar -
Bianchi, R. J./Drew, M. E. (2012): Sustainable stock indices and long-term portfolio decisions. Journal of Sustainable Finance & Investment, Vol. 2(3-4), 303–317.
Google Scholar -
Boehmer, E./Masumeci, J./Poulsen, A. B. (1991): Event-study methodology under conditions of event-induced variance. Journal of Financial Economics, Vol. 30(2), 253–272. https://doi.org/10.1016/0304-405X(91)90032-F.
Google Scholar -
Busch, T./Johnson, M./Pioch, T./Kopp, M. (2018): Consistency of Corporate Carbon Emission Data.
Google Scholar -
Carhart, M. M. (1997): On Persistence in Mutual Fund Performance. The Journal of Finance, Vol. 52(1), 57–82. https://doi.org/10.1111/j.1540-6261.1997.tb03808.x.
Google Scholar -
Carolina Rezende de Carvalho Ferreira, M./Amorim Sobreiro, V./Kimura, H./Luiz de Moraes Barboza, F. (2016): A systematic review of literature about finance and sustainability. Journal of Sustainable Finance & Investment, Vol. 6(2), 112–147. https://doi.org/10.1080/20430795.2016.1177438.
Google Scholar -
Ceccarelli, M./Ramelli, S./Wagner, A. F. (2020): Low-carbon Mutual Funds. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3353239.
Google Scholar -
Chatterji, A. K./Durand, R./Levine, D. I./Touboul, S. (2016). Do ratings of firms converge? Implications for managers, investors and strategy researchers. Strategic Management Journal, Vol. 37(8), 1597–1614. https://doi.org/10.1002/smj.2407.
Google Scholar -
Chava, S. (2014): Environmental Externalities and Cost of Capital. Management Science, Vol. 60(9), 2223–2247. https://doi.org/10.1287/mnsc.2013.1863.
Google Scholar -
Christensen, D./Serafeim, G./Sikochi, A. (2019): Why is Corporate Virtue in The Eye of The Beholder? The Case of ESG Ratings. Working Paper.
Google Scholar -
De Haan, M./Dam, L./Scholtens, Bert (2012): The drivers of the relationship between corporate environmental performance and stock market returns. Journal of Sustainable Finance & Investment, Vol. 2(3–4), 338–375.
Google Scholar -
Eccles, R. G./Stroehle, J. (2018): Exploring Social Origins in the Construction of ESG Measures. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3212685.
Google Scholar -
Edmans, A. (2011): Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics, Vol. 101(3), 621–640. https://doi.org/10.1016/j.jfineco.2011.03.021.
Google Scholar -
Fatemi, A./Fooladi, I./Tehranian, H. (2015): Valuation effects of corporate social responsibility. Journal of Banking & Finance, Vol. 59, 182–192. https://doi.org/10.1016/j.jbankfin.2015.04.028.
Google Scholar -
Fink, L. (2020): A Fundamental Reshaping of Finance: BlackRock Letter to CEOs. Retrieved from https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter.
Google Scholar -
Friede, G./Busch, T./Bassen, A. (2015): ESG and financial performance: aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, Vol. 5(4), 210–233. https://doi.org/10.1080/20430795.2015.1118917.
Google Scholar -
Friedman, M. (2002): Capitalism and freedom: University of Chicago press.
Google Scholar -
Gibson, R./Krueger, P./Riand, N./Schmidt, P. S. (2019): ESG rating disagreement and stock returns. Working Paper.
Google Scholar -
Görgen, M./Jacob, A./Nerlinger, M. (2021): Get green or die trying? Carbon risk integration into portfolio management. The Journal of Portfolio Management, forthcoming.
Google Scholar -
Görgen, M./Jacob, A./Nerlinger, M./Riordan, R./Rohleder, M./Wilkens, M. (2020): Carbon Risk. Working Paper.
Google Scholar -
Grewal, J./Riedl, E. J./Serafeim, G. (2019): Market Reaction to Mandatory Nonfinancial Disclosure. Management Science, Vol. 65(7), 3061–3084. https://doi.org/10.1287/mnsc.2018.3099.
Google Scholar -
Hartzmark, S. M./Sussman, A. B. (2019): Do Investors Value Sustainability? A Natural Experiment Examining Ranking and Fund Flows. The Journal of Finance, Vol. 74(6), 2789–2837. https://doi.org/10.1111/jofi.12841.
Google Scholar -
Horváthová, E. (2010): Does environmental performance affect financial performance? A meta-analysis. Ecological Economics, Vol. 70(1), 52–59. https://doi.org/10.1016/j.ecolecon.2010.04.004.
Google Scholar -
Hussain, N./Rigoni, U./Cavezzali, E. (2018): Does it pay to be sustainable? Looking inside the black box of the relationship between sustainability performance and financial performance. Corporate Social Responsibility and Environmental Management, Vol. 25(6), 1198–1211. https://doi.org/10.1002/csr.1631.
Google Scholar -
Keele, D. M./DeHart, S. (2011): Partners of USEPA Climate Leaders: an Event Study on Stock Performance. Business Strategy and the Environment, Vol. 20(8), 485–497. https://doi.org/10.1002/bse.704.
Google Scholar -
Kolari, J. W./Pynnönen, S. (2010): Event Study Testing with Cross-sectional Correlation of Abnormal Returns. Review of Financial Studies, Vol. 23(11), 3996–4025. https://doi.org/10.1093/rfs/hhq072.
Google Scholar -
Kothari, S. P./Warner, J. B. (2007): Chapter 1 – Econometrics of Event Studies. In Handbook of Empirical Corporate Finance : Handbooks in Finance (pp. 3–36). San Diego: Elsevier. https://doi.org/10.1016/B978-0-444-53265-7.50015-9.
Google Scholar -
Kotsantonis, S./Serafeim, G. (2019): Four Things No One Will Tell You About ESG Data. Journal of Applied Corporate Finance, Vol. 31(2), 50–58. https://doi.org/10.1111/jacf.12346.
Google Scholar -
Krueger, P. (2015): Corporate goodness and shareholder wealth. Journal of Financial Economics, Vol. 115(2), 304–329. https://doi.org/10.1016/j.jfineco.2014.09.008.
Google Scholar -
Li, F./Polychronopoulos, A. (2020): What a Difference an ESG Ratings Provider Makes!
Google Scholar -
López, M. V./Garcia, A./Rodriguez, L. (2007): Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index. Journal of Business Ethics, Vol. 75(3), 285–300. https://doi.org/10.1007/s10551-006-9253-8.
Google Scholar -
Love, I. (2011): Corporate Governance and Performance around the World: What We Know and What We Don’t. The World Bank Research Observer, Vol. 26(1), 42–70. https://doi.org/10.1093/wbro/lkp030.
Google Scholar -
Matsumura, E. M./Prakash, R./Vera-Muñoz, S. C. (2014): Firm-Value Effects of Carbon Emissions and Carbon Disclosures. The Accounting Review, Vol. 89(2), 695–724. https://doi.org/10.2308/accr-50629.
Google Scholar -
Molina-Azorín, J. F./Claver-Cortés, E./López-Gamero, M. D./Tarí, J. J. (2009): Green management and financial performance: a literature review. Management Decision, Vol. 47(7), 1080–1100. https://doi.org/10.1108/00251740910978313.
Google Scholar -
Monk, A. H. B./Prins, M./Rook, D. (2019): Data Defense in Sustainable Investing. Working Paper. Advance online publication. https://doi.org/10.2139/ssrn.3474072.
Google Scholar -
Oberndorfer, U./Schmidt, P./Wagner, M./Ziegler, A. (2013): Does the stock market value the inclusion in a sustainability stock index? An event study analysis for German firms. Journal of Environmental Economics and Management, Vol. 66(3), 497–509. https://doi.org/10.1016/j.jeem.2013.04.005.
Google Scholar -
Porter, M. E. (1991): America s green strategy. Reader in Business and the Environment, 33.
Google Scholar -
Porter, M. E./van der Linde, C. (1995): Toward a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Perspectives, Vol. 9(4), 97–118. https://doi.org/10.1257/jep.9.4.97.
Google Scholar -
PRI (2019). Principles for Responsible Investment Annual Report.
Google Scholar -
Qontigo (2020). DAX® 50 ESG – The New Standard in German ESG Investing.
Google Scholar -
Ramelli, S./Wagner, A. F. (2020): Feverish Stock Price Reactions to COVID-19. Working Paper.
Google Scholar -
Ramiah, V./Martin, B./Moosa, I. (2013): How does the stock market react to the announcement of green policies? Journal of Banking & Finance, Vol. 37(5), 1747–1758. https://doi.org/10.1016/j.jbankfin.2013.01.012.
Google Scholar -
Revelli, C./Viviani, J.-L. (2015): Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis. Business Ethics: A European Review, Vol. 24(2), 158–185. https://doi.org/10.1111/beer.12076.
Google Scholar -
Scherer, L./Behrens, P./Koning, A. de/Heijungs, R./Sprecher, B./Tukker, A. (2018): Trade-offs between social and environmental Sustainable Development Goals. Environmental Science & Policy, Vol. 90, 65–72. https://doi.org/10.1016/j.envsci.2018.10.002.
Google Scholar -
Schramade, W. (2017): Investing in the UN Sustainable Development Goals: Opportunities for Companies and Investors. Journal of Applied Corporate Finance, Vol. 29(2), 87–99. https://doi.org/10.1111/jacf.12236.
Google Scholar -
Walley, N./Whitehead, B. (1994): It’s not easy being green. Reader in Business and the Environment, Vol. 36(81).
Google Scholar -
Zerbib, O. D. (2019): The effect of pro-environmental preferences on bond prices: Evidence from green bonds. Journal of Banking & Finance, Vol. 98, 39–60. https://doi.org/10.1016/j.jbankfin.2018.10.012.
Google Scholar
Abstract
The demand for sustainable investments is growing worldwide. As a result, the DAX 50 ESG was introduced in March 2020 as the first ESG index by the German stock exchange. It is promoted as the new standard for German sustainable investments. We are the first to comprehensively examine the financial and non-financial performance of the index and its constituents. Therefore, we examine the sustainability performance using both ESG criteria and the alignment of products and services with the Sustainable Development Goals. Our results show that the DAX 50 ESG may only to a limited extent be promoted as the most sustainable German index. Moreover, since inception as well as during the COVID-19 crisis, the DAX 50 ESG’s financial performance is comparatively worse. Our findings suggest that stock markets penalize the inclusion of a firm in the DAX 50 ESG in the short run, thus affecting the overall index performance. Our analysis of the DAX 50 ESG further increases investor attention to sustainable financial products and enables better investment decisions.