Does sustainability generate better financial performance? review, meta-analysis, and propositions.

This article presents findings from a survey of 1,141 papers and 27 meta-reviews published between 2015 and 2020, indicating that the financial performance of ESG investing is similar to conventional investing, with one-third of studies showing superior performance, contrasting with findings from management literature and industry reports. Until recently, top finance journals did not publish studies related to climate change, yet these studies capture the forefront of corporate risk and ESG investment strategies. Based on these findings, three propositions are proposed: 1) ESG integration performs better as a strategy; 2) ESG investing provides asymmetric benefits during crises; and 3) decarbonization strategies may capture a climate risk premium.

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●Does Sustainability Generate Better Financial Performance? Review, Meta-analysis, and Propositions