ESG And Intangibles: Driving Value Creation Across Companies

Yo Takatsuki & Ryohei Yanagi

Research Organisation
AXA Investment Managers

Report Date
Dec. 6, 2019

Document summary

In this paper, AXA Investment Managers use empirical research to show how material ESG factors – as defined by the Sustainability Accounting Standards Board (SASB) – are positively linked to the price-to-book ratio of companies in the global pharmaceutical industry.

The authors illustrate that the increase in intangible value on balance sheets is driven in part by positive ESG practices of companies. Engagement interaction with senior executives and board directors of pharmaceutical companies provide additional insight on the effect and cause.

Demonstrating the value of robustly integrating environmental, social and governance (ESG) factors into investing is critical to the success and credibility of responsible investment.