ESG components and equity returns: Evidence from real estate investment trusts
Published in International Review of Financial Analysis, 2024
For US Real Estate Investment Trusts (REITs), this study finds that higher environmental performance negatively impacts future stock returns and firm fundamentals, while social and governance performance are positively associated with both. These contrasting effects stem from environmental investments’ high costs versus the benefits of social and governance practices, underscoring that ESG’s influence on equity returns is component-specific.