Exhibit 1 The COVID-19 sell-off and incipient recovery

In this report, the first in Sustainalytics’ new Portfolio Research series, we offer analysis about where investors can get the biggest “ESG bang for their buck” as they navigate the COVID-19 market recovery. While global equity markets are a long way from reaching their pre-pandemic peak, they have rebounded sharply in recent weeks, as shown in Exhibit 1.

Applying unique ESG at a reasonable price (ESGarp) scores, we show where investors can find stocks with low levels of ESG risk that also trade at a relatively low price to earnings (P/E) ratio. We expect this will be an increasingly important quest for investment managers in the future, as the COVID-19 outbreak is likely to further raise the market’s interest in ESG integration and boost demand for stocks with a low ESG risk profile.

 

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