ESG as a Booster for Logistics Stock Returns—Evidence from the US Stock Market

Abstract

This article investigates the connection between US logistics companies’ commitment to environmental, social and fair governance (ESG) strategy and their performance on the US stock market during the 2007–2022 period. The research considers historical data analysis, CAPM and a comparison of optimised portfolios. According to the results of the analyses, ‘green’ logistics stocks are less volatile, and hence less risky, and more profitable compared to ‘non-green’ logistics stocks. The Great Recession (2007–2009) and the COVID-19 pandemic (2020) had the greatest impact on stock volatility, in terms of the US stock market. Optimised during the time of the Ukrainian crisis, green logistics portfolios were shown to have higher returns, but also risks and Sharpe ratios, than ‘non-green’ ones. The results confirm there to be a connection between companies’ commitment to ESG strategy and enhanced stock performance, which contributes to the importance of the ESG agenda.

The impact of environmental, social and governance (ESG) scores on stock market: evidence from G7 countries

“…It would be pertinent to assess the relationship between ESG scores and the stock market specifically for G7 countries in the context of this research. The findings from these studies indicate that a consensus regarding the impact of ESG scores on the stock market and financial performance is not yet reached for G7 countries (Almeyda and Darmansya, 2019; Ersoy et al , 2022; Rodionova et al , 2022). For instance, Almeyda and Darmansya (2019) found a positive association between ESG scores and return on assets (ROA) and return on capital (ROC) in G7 countries, but no statistically significant correlation between stock prices and price-to-earnings ratio (P/E).…”

The Influence of Environmental, Social, Governance, and Corporates Scandals on the Stock Volatility

“…Research conducted by Rodionova et al (2022) on logistics companies in the United States shows that companies that implement ESG in practice (green logistics companies) have lower stock volatility than logistics companies that do not implement ESG (non-green logistics companies). The same results were found by Shakil (2022) in textile and clothing companies.…”