The Halo's Creed

UniCredit ESG Research

Research Organisation
UniCredit Group

Report Date
Nov. 1, 2010

Document summary

The Halo’s Creed, an investment philosophy based on maximising both shareholder and broader stakeholder returns, is based on the ten thematic principles of the European Sustainable Development Strategy aiming to incorporate the effects of ESG issues into stock valuation and selection processes. Event study analysis indicates that the efficient-market hypothesis remains weak regarding the information integration of ESG issues. UniCredit believes capital asset pricing models efficiency can be improved by adding a sustainability dimension, given expectations that capitalised ESG issues can affect stock valuations by an average 1.7%. Through mainstreaming ESG information stock prices will gradually reflect ESG-related capital flows.

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