ESG Quant

ESG Quant (or ESG Quantitative) is an investment strategy, developed by Arabesque Partners,[1] which involves quantitative equity investing[2] while utilizing ESG (environmental, social, and corporate governance) information, often referred to as "non-financial"[3] information. ESG Quant strategies are implemented within systematic trading or quantitative trading approaches that leverage a large and growing collection of commercial ESG, alternative and non-profit or  academic datasets.[4] As such, there is no human judgment or discretionary buy-sell decision making; rather, “in a pure quant model the final decision to buy or sell is made by the model”[5] or through the “utilization of an expert system that replicates previously captured actions of real traders.”[6]

  1. ^ Kell, Georg (2015-10-09). "COP 21: Why It's Time to Bet Big on Sustainability". Huffington Post. Retrieved 2015-10-13. A particularly exciting development is the emergence of a new generation of asset managers that understand how to leverage ESG data not just to reduce risk but also to actively enhance performance. Among them, Arabesque, the world's first ESG Quant fund.
  2. ^ Fabozzi, Frank J.; Focardi, Sergio M.; Kolm, Petter N. (March 2010). Quantitative Equity Investing: Techniques and Strategies. John Wiley & Sons. ISBN 978-0-470-26247-4.
  3. ^ "Definition of non-financial performance measures". Financial Times. Retrieved 2015-10-13.
  4. ^ Governance, Harvard Law School Forum on Corporate; Regulation, Financial (10 November 2018). "Decoding Quant ESG". corpgov.law.harvard.edu. Retrieved 2020-07-24.
  5. ^ UN PRI. PRI Reporting Framework 2014/15 Main definitions (PDF) (Report). p. 5. Retrieved 2015-10-13.[permanent dead link]
  6. ^ Treleaven, Philip; Galas, Michal; Lalchand, Vidhi (2013). "Algorithmic Trading Review". Communications of the ACM. 56 (11): 76–85. doi:10.1145/2500117. S2CID 14938340.