Companies with better environmental, social, and governance (ESG) ratings generally outperformed those with lower ratings over the 2013-to-2021 period, according to Kroll’s new ESG and Global Investor Returns Study.

Fifty percent premium: Globally, “ESG leaders” earned an average annual return of 12.9%, compared to an average 8.6% annual return “laggard” companies earned—about a 50% premium in terms of relative performance by top-rated ESG companies, the study says. This holds true for the U.S., where the “ESG leaders” earned an average annual return of 20.3%, compared to a 13.9% average annual return earned by “laggard” companies.

The study analyzes the relationship between a company’s total stock returns (dividends plus capital appreciation) and its MSCI ESG ratings over the 2013-to-2021 period. The study examines over 13,000 publicly traded companies across a variety of geographies and industries and their ESG ratings to determine the correlation of ESG ratings to company performance. For more information and to download the study, click here.