Can equity value investing be sustainable? – BNP Paribas Asset Management

Traditional equity value indices, which incorporate only the least expensive companies, tend to be associated with a higher carbon footprint and a lower environmental, social and governance (ESG) score than corresponding traditional, market-capitalisation-weighted indices which invest in all listed companies.

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... In this article BNP Paribas Asset Management show that value portfolios do not need to overweight companies with higher carbon emissions. It is possible to tilt the allocation of value portfolios towards stocks with higher ESG scores. In BNP Paribas Asset Management's view, the key to success is to reduce sector biases and to go for less risky, more profitable and relatively cheap companies.

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