Equitorial: ESG is here to stay – and we’re better for it

Sustainability. We mean it.

Insight

4 June 2025 |

Active ESG

ESG has become a polarising subject in recent years, dividing opinion across economic, political and social lines. For the Federated Hermes Global Equity team, however, ESG has always been about one thing: enhancing returns.

Global Equity ESG Equitorial newsletter 2025

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Fast reading

We first started researching environmental, social, and governance (ESG) factors in 2007, with the aim of establishing whether there was a relationship between ESG and performance.
The first link was established in 2014, where our seminal research paper demonstrated that governance was additive to returns. Subsequent research over the intervening period established the relationship between environmental and social factors and performance.
We concluded that ESG integration should be active, making use of constructive, long-term stewardship with company management and boards, which enables us to capture the dynamic nature of industry trends and company pathways, providing a forward-looking view that is otherwise unavailable from merely looking at company disclosures.