Researcher ORCID Identifier


Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Eric Hughson

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2023 Elizabeth Iwicki


In this paper, I estimate the monthly alpha of highly rated ESG stocks, with the motivation to assess the effects of ESG investors on public equity markets. I hypothesize, consistent with the motivating theory of Heinkel et al. (2001), that the shift in investor preferences toward ESG-friendly investments leads to the underperformance of a broad ESG portfolio relative to a portfolio of comparable stocks. I test my hypothesis using the methodology of Hong and Kacperczyk (2009) and Wallace (2022), where I apply the methods to an ESG portfolio rather than a “sin” portfolio. Consistent with my hypothesis, I find that ESG portfolio significantly underperforms the comparable companies through the 2006-2021 period.