Sustainability and dividends

A study by Rosenberg Equities, the quantitative arm of Axa Investment Managers, shows that investors do not have to accept a lower dividend yield to invest sustainably. Without receiving a low rate of return, global dividend strategies are therefore possible.

In an analysis of 4,200 shares from both industrialised and emerging economies, Rosenberg Equities has found that CO2 emissions are concentrated in a few industries such as energy and raw materials. However, these two sectors also distribute high dividends. This could indicate that the CO2 emissions in an investor’s portfolio can only be lowered by investing in industries with lower dividend yields.

On closer examination, however, it becomes clear that the high averages in these two industries are caused by individual companies. Even if these companies were to be removed from the portfolio, the dividend yield would remain high. Moreover, green stocks that still distribute attractive dividends can be found in all sectors.

The study also showed that companies paying high dividends exhibit improved corporate governance, but this does not reduce the risk of dividend reductions.