Why is generating higher returns from ESG a challenge?

The popularity of ESG investing has grown significantly in recent years.

Strong ESG practices, such as a higher-quality board and management team; a diverse, skilled and stable workforce; and efficient use of resources (such as energy and water) can lead to higher and more persistent profitability for a firm.  Perhaps surprisingly, however, there is limited evidence that ESG insights can produce alpha for investors. Why is it a challenge for investors to generate higher returns from ESG? ESG drives outperformance as 'social' focus begins to see gains Put simply, the benefits from readily observable ESG attributes are already priced in. This means many c...