The S&P500 ESG Index has outperformed the S&P500 by 2.2% since its launch in January 2019.
S&P Global says the ESG index was designed to closely replicate the risk and return profile of the S&P 500 but not necessarily to outperform the parent index. However, the index provider says a rules-based selection criteria driven by ESG has led to the selection and removal of certain companies and that this has partly driven its outperformance. The outperformance may also be attributed to increased inflows into ESG strategies during the period.
With the exception of Japan, which showed a small underperformance, each region outperformed, including Europe, the US, Latin America, and other global variants.