Innovest research shows returns on “natural capitalism”

Doing some homework on alternative energy and sustainable investing, I came across a paper in the Financial Analysts’ Journal using data from Innovest showing superior returns for a portfolio of companies rated highly on environmental metrics.
The difference between this study and earlier research is that green performance is measured, not just by reducing pollution, but by eco-efficiency, “defined as the ratio of the value a company adds (e.g., by producing products) to the waste the company generates by creating that value.” This makes some sense — attention to material efficiency, like supply chain efficiency, would improve a company’s performance.

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