JUST Companies Exhibit Lower Investment Risk
In this report, we examine whether companies that behave more justly are also more resilient to market and earnings risks. We found significant evidence that stocks in the top quintile of JUST scores carry less investment risk than those with lower JUST scores. For instance, top-quintile ranked JUST companies have 18% – 22% lower volatility, 6% lower beta, 5% shallower drawdowns, near-half the quarterly earnings-per-share volatility, and 4.5% higher ROIC than bottom-quintile companies. These findings are consistent, though more pronounced in magnitude, than other research from the Environmental, Social, and Governance (ESG) investment community.
JUST Capital is an unaligned non-profit that ranks companies against Americans’ top priorities. JUST’s second annual ranking on corporate behavior is slated to be published in December.