Asia School of Business

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Does green reward?

By Mustabeen Ul Bari and Elsa Satkunasingam*

Study of Malaysian market suggests green stocks outperform in the short term to ESG regulatory changes

Interest in businesses that prioritise governance, environmental, social responsibility and governance or ESG has surged in recent years, driven primarily by consumer demand, regulations, and unprecedented climate shocks. From an investor perspective, there is an expectation that businesses practising ESG would be more prepared to manage climate risks, scarcity of resources, and consumer demand for more eco-friendly products and services.

There is evidence that in the US, investor support for green stocks over brown has surged, driven not by anticipation of higher returns but by increasing concern about climate change.

Originally published by Asia Asset Management.

*Mustabeen Ul Bari is a graduate of the Master of Business Administration programme at the Asia School of Business (ASB) in Kuala Lumpur. Elsa Satkunasingam is a director and senior lecturer in executive education at the school. The authors would like to express their appreciation to Yasmin Ahmad of ASB Executive Education for her research assistance.