Global AI

The impact of the SDGs on investment and financial returns

Concerning the DOL’s proposal limiting access to ESG funds in US retirement accounts, our research, Sustainable Investment – Exploring the Linkage Between Alpha, ESG, and SDG’s a ‘TOP TEN’ listed Social Science Research Network (SSRN) paper, dispels the notion that ESG issues are not relevant to portfolio value and are in conflict with an asset manager’s fiduciary duties.  

We show there is no trade-off between financial returns vs. positive societal footprint.  In this paper, we worked with the $77 billion UN Pension, and analyzed the relationship between alpha generation and ESG metrics. This is the first research paper that uses SDG data for portfolio management. 

Our research shows that an ESG momentum portfolio outperforms the MSCI US index and has a relatively better net influence on the SDGs, which we call a positive SDG ‘footprint,’ than that of the index. 

Our forthcoming research shows constructing a portfolio based on our daily SDG scores also creates alpha and outperforms the MSCI benchmark.  We also show our daily SDG scores are leading indicators and early warning signals of MSCI ratings.

Global AI Corp., a Big Data company, has six years of daily SDG rankings, ratings and benchmarks for 20,000 global companies and most sovereigns for each of the 17 SDGs as well as an overall SDG score, rating and benchmark for each company.    

We access massive amounts of structured and unstructured data from more than 100,000 sources across more than 150 countries and 60 languages  eliminating self-reported biases.

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