ESG Factors in Corporate Bond Returns: Perspectives for Academic Research and Investors


Asset Pricing, Empirische Kapitalmarktforschung

Journal of Environmental Law and Policy, 2017, 40 (4), 293-298.


  • Corporate Bonds
  • ESG Factors
  • Socially Responsible Investing
  • Sustainable Finance


Bektic, D.


In this article, I analyze the latest research on environmental, social, and governance (ESG) factors and corresponding corporate bond returns. Since the development of sustainable and ethical investing, there has been a vigorous and ongoing debate on whether ESG factors in corporate bond markets enhance returns. Unfortunately, empirical evidence on ESG factors in corporate bond markets is mixed and inconclusive. Some evidence supports positive returns, other evidence suggests a negative relation, and a third strand of the literature finds that the relation is unstable. However, research on this topic is seemingly contradictory and in this article, I address this disconnect in recent empirical research.

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