In this paper, we consider the salient challenges associated with ESG investing, and how quantitative approaches to ranking ESG contributing factors may address these challenges. Currently, managers typically use fundamental approaches to assess stocks and build “ESG portfolios.” However, just as the advances in quantitative MPT portfolios have gained ground over fundamental analyses of stock returns in past years, so can quantitative rankings of ESG factors improve on purely fundamental ESG approaches in future years. Our intent is to address the advantages and 3 possibilities of quantitative capabilities in ESG investing.

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