Investors intent on backing US firms that claimed to pursue ESG objectives between 2010 and 2018 could have experienced better outcomes if they had invested in non-ESG funds, according to research published earlier in 2021 by two academics.

Using a comprehensive sample of self-labelled ESG funds from 147 US investment management firms, Aneesh Raghunanda from the London School of Economics (LSE) and Shivaram Rajgopal from the Columbia Business School, found these held portfolios with worse track records than those held by non-ESG funds managed by the same institutions, over a wide range of criteria.

Although the research...