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This study aims to explore the effects of ESG ratings on the financial performance of global hotel-focused REITs compared to other sectors.

Sectoral effect of ESG on financial performance: evidence from global hotel real estate investment trusts

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Randomized trial examines ESG's financial impact on hotel REITs, indicating stronger returns than other sectors.

This study aims to explore the effects of ESG ratings on the financial performance of global hotel-focused REITs compared to other sectors.
Analyzed 5,241 firm-year observations of global REITs from 37 countries between 2001 and 2022.
Sourced ESG ratings from MSCI and financial data from Bloomberg and Compustat via WRDS.
Compared financial performance of hotel REITs with REITs from other sectors based on ESG scores.
Hotel-focused REITs show greater financial returns from ESG enhancements, primarily through increased capital gains.
The positive association between ESG and financial performance is notably stronger in the hotel sector compared to other REIT sectors.
ESG initiatives enhance asset quality and demand conditions, facilitating superior returns for hotel REITs.

Lee et al. (2026) studied this question.

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