The question of the green risk premium and ESG performance is on everyone’s lips. This question is related to several other issues that can be summarised as follows:
- What is the impact of climate investing on portfolios’ returns?
- Is there a bubble in the ESG investing market?
- Do investors face a crowding of green assets risk?
- Can we speak about an ESG risk premium?
- Is ESG a new risk factor?
Although all these topics are in fact interconnected, it is important to precisely identify the different notions, and avoid any confusion when speaking about the risk premium of ESG and green finance.