ESG link to higher returns for stocks

"We estimate that a strong ESG score, high ROEs and superior earnings result in investments with robust long-term returns," says RHB Research.

PETALING JAYA: RHB Research has come up with what it calls its environmental, social and governance (ESG) “diamonds” for the year, using criteria which includes a return on equity (ROE) of more than 15%.

In its report to clients yesterday, the research house said since mid-2021, it has assigned ESG scores to all companies under its coverage, monitored these scores, and also integrated them into its valuations.