The Covid-19 pandemic influenced the world with quarantines, travel bans, social distancing, and much more. Most remarkably, it brought the economy to a steep recession with changes in customer behavior and shocks to the financial markets. Combined with this, sustainable and green investing have grown in importance for firms that aim to incorporate sustainable practices in their businesses. This thesis evaluates the relationship between ESG and financial performance for Swedish issued mutual funds in the periods before, during, and after the covid pandemic. To capture the returns this study uses the Sharpe ratio, which penalizes volatility in the turns of funds and outputs risk-adjusted returns. The findings of this thesis highlight the importance of integrating non-financial metrics into portfolio management. The results found evidence that there is a difference in the performance between the two fund portfolios. Furthermore, this study will investigate the impact ESG variables have on the risk-adjusted rate of return. The results were that there is no compelling evidence of ESG variables impacting the returns. Moreover, significant insights from this study can be made to the Modern Portfolio Theory and Stakeholder Theory. By using Modern Portfolio Theory as the governing theory, a theoretical discussion has been made about the relationship between green investments and financial performance in times of sound economic markets and under financial crisis. This study is a quantitative study that has adopted the deduction approach. The authors of this thesis have retrieved 2 different portfolios, ESG and non-ESG, and compared the two groups against each other. 3 different periods have also been identified in the thesis: pre, during, and post Covid. The performance of the two portfolios has been examined during the three different stages to see how they have performed with hopes of finding empirical evidence that investing in ESG practices really is profitable. Statistical models such as OLS, heteroskedasticity, and more have been used in the study with the aim of helping the authors reach a conclusion.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:umu-225590 |
| Date | January 2024 |
| Creators | Westman, Alexander, Rajak, Stefan |
| Publisher | Umeå universitet, Företagsekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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