Firms finding it hard to balance ESG with profits, says Eugene Fama

Fama, known for his empirical work on portfolio theory, asset pricing, and the efficient-market hypothesis, was speaking to Uday Kotak, managing director and CEO of Kotak Mahindra Bank

Companies across the world are finding it difficult to balance environmental, social and governance (ESG)-focused investing with profitability, and regulators too aren’t thinking hard about it, said Eugene Fama, the 2013 Nobel Prize winning economist.

“People are willing to pay more for products that are environmentally sustainable. There are ESG goals and profitability goals. I hope ESG products and profitability are compatible. I don’t think regulators are thinking enough about this either,” said professor Fama at the annual RH Patil memorial dialogue on Tuesday.

Fama, known for his empirical work on portfolio theory, asset pricing, and the efficient-market hypothesis, was speaking to