“Environmental, social and governance (ESG) factors are a source of alpha investing, though simply buying stocks that have high ESG ratings isn’t a sufficient reason for outperformance, investment managers say. The investors were speaking at panels or on the sidelines of the Cayman Alternative Investments Summit, which this year is focusing on global, digital, and responsible investing. Even though there are large discrepancies between ratings for the same company from different ESG ratings providers, the point is to pay attention to direction. “Where the money is going to be made is in choosing companies moving in a positive direction, not the ones with the lowest emissions,” says Bonnie Wongtrakool, global head of ESG investments and a portfolio manager at Western Asset Management. “It’s the investor’s job to look ahead, not rely on the data or not rely on the ratings.”

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