JP Morgan Asset Management say that inclusion of ESG factors leads to better outcomes for corporate bond investors. In a new report, the firm says that applying ESG scores to
portfolios can lead to reduced drawdowns, reduced volatility and higher risk adjusted returns for top grade debt.
The firm also used MSCI ESG scores for top grade, high yield and EM debt and compared them to credit rating agency scores. They found that many liabilities relating to ESG were not included in traditional credit ratings.