Hi Ben, I think you're making a lot of valid points and more research on ESG is needed. We wanted to name the data provider, but after seeing the slightly negative results on ESG, they asked us to remove their name as selling ESG data represents their business.

However, most of the results are kind of intuitive and are likely to be verified by other researchers. Companies that rank high on ESG are more probable to come from the tech than the energy sector given structural industry differences. Sectoral biases lead to factor tilts.

Taking a further step back: Companies that rank high on ESG need to fulfill the requirements of stakeholders, not just shareholders, which consumes resources where the benefit for shareholders is debatable. Investing in ESG should not be seen as a potential source of alpha from our perspective, but more a personal preference.