A comparative analysis of ESG and traditional equity indices using the Markowitz model

The main objective of this thesis is to compare the performance of ESG indices with the performance of conventional equity indices. ESG indices have become increasingly popular as global citizens wake up to the dangers of climate change and social inequality. This thesis reviews the relevant literature and financial theories, analyses a range of performance indicators, and statistical test constructing a model based on Markowitz’s theory that demonstrates the performance of ESG versus traditional indices. The large amount of literature that already exists on this topic demonstrates the importance of these indices. This study adds to that body of literature as well offering a much-needed analysis of the role of ESG investment as, globally, economies struggle to cope with the coronavirus pandemic that emerged at the end of 2019.