Our disagreement is not about my beliefs, or your beliefs.

It's about drawing irresponsible conclusions based on razor thin evidence and flimsy analysis.

When you have two equally plausible but mutually exclusive theories, the standard of evidence required to declare one of them correct is very high.

You cannot, for example, flip a coin 20 times, get 9 Heads and 11 Tails and then reasonably conclude that "Tails Never Fails". Anyone convinced by that line of reasoning would be fundamentally misunderstanding probability theory and the law of large numbers.

In the case at bar, the theories are:

A. Positive ESG performance requires diverting resources away from shareholders, results in capital misallocation, suboptimal diversification, higher research costs, etc...

B. Positive ESG performance reduces reputational, operation, legal and regulatory risk, reduces the cost of capital, improves free cash flow stability and sustainability, signals superior management, reduces the occurrence of fraud, etc...

Since both of these theories appear to be equally plausible at face value, as a researcher you ought to have considered, before even beginning, what type of analysis is best suited to reasonably conclude one way or another. Had you done this, you would have realized that ESG factors, being qualitative in nature, are not particularly well suited for quantitative factor analysis. Error #1.

Nonetheless, having concluded that you wanted to proceed with the methodology you ultimately selected, you ought to have quickly realized that your performance data sample was much too small to render a meaningful analysis. Error #2.

But since you proceeded anyway, surely when you saw the results of your analysis, you ought to have questioned the materiality of the performance differential observed, and whether it could be reasonably attributed to chance. Error #3.

And when you decided to publish your research, you had full control over the language you used. You could have easily stated your factual findings, while humbly indicating that your research is inconclusive. Instead, you chose to use your research to create a veneer of credibility and make irresponsible investment recommendations to an entire generation investors and a troubled pension system. Error #4.

I give you full credit for being a gentleman in your debates, but your analysis does not belong in a CFA publication.

This is my last post.