Social enterprise stocks weather market storm better: BofA report

Study shows companies with ESG stocks outperform, suffer lesser earnings cut

The unprecedented sell-off in the market due to the coronavirus pandemic has underscored the importance of environment, social and governance (ESG) investing.

According to an analysis done by Bank of America (BofA), stocks with high ESG scores have fallen less than the overall market. Also, the downward earnings revision in these stocks has been less compared to the rest of the market. Notably, the assets under management (AUM) of ESG-focused exchange traded funds (ETFs) have grown this year even as the assets of passive funds based on the S&P500 index have shrunk drastically.

ESG is a term used to determine a company’s