Date of Award

Spring 2022

Degree Type



Moore School of Business

Director of Thesis

Dr. Xuelin Li

Second Reader

Paul Freed, Ph.D. Finance Candidate


ESG Investing is the application of environmental, social, and governance factors to identify material investment risks and growth opportunities. Though traditionally viewed as non-financial factors, this paper asserts that ESG factors are indeed financially material. This work first surveys the current state of ESG Investing, its shortcomings, and its success despite these inherent issues. Section II adds a new perspective to ESG research by examining the applications of ESG scores in portfolio management. The study conducts t-tests to answer whether the typical holdings of an ESG mutual fund are more sustainable than those of traditional funds. The paper then focuses on the potential for ESG factors to be quantified, including raising new questions about this quantitative potential. Lastly, suggestions are made on how ESG could be cemented as a force of societal change instead of becoming another inconsequential ethical investing fad.

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