Finance for Good

The main question guiding the debate on sustainable investing is whether companies that prioritize ethical practices also deliver better financial results. This question has elicited diverse viewpoints, and a consensus has yet to be reached. One approach of sustainable investing is Environmental, Social, and Governance (ESG) investing, which assesses companies based on their efforts in three key areas: environmental, social, and governance. I will provide a global data-driven analysis to examine the differences in performance and risk between ESG leaders and laggers. Additionally, I will explore the same question for Shariah-compliant companies, which are defined by quantitative screens such as debt-to-equity ratio, exclusion of interest-based transactions, and other Islamic prohibitions.