Does ESG Investing Pay off? Comparing the Performance of ESG and Traditional ETFs Across European and US Markets

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Analysis reveals ESG ETFs enhance risk-adjusted performance during market stress, suggesting diversification benefits in investment strategies.

ESG ETFs improve performance outcomes in both European and US markets, offering notable benefits during market stress.
In the US, ESG ETFs enhance risk-adjusted returns, particularly under unstable market conditions.
The analysis spans a decade from 2014 to 2024, capturing both pre-crisis and crisis periods.
Findings highlight the significance of investment strategies in determining the effectiveness of ESG ETFs.

Tenorio-Salgueiro et al. (2025) studied this question.

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Analysis reveals ESG ETFs enhance risk-adjusted performance during market stress, suggesting diversification benefits in investment strategies.