AQR’s Asness Explains the Quant View on ESG Investing

The video discusses the tradeoffs between ESG constraints and portfolio returns, emphasizing the importance of investor education. It explains the simplest form of ESG as a restricted list, where investors avoid 'bad' companies. The impact of ESG on expected returns and portfolio diversity is analyzed, highlighting that a smaller investment universe may lead to less diversity. The video also describes how ESG can raise the cost of capital, affecting project evaluations. Finally, it concludes that any potential give-up in returns is a contribution to the change investors seek.

In what way does the speaker believe that ESG investing can affect the world?

What is the speaker's perspective on the potential impact of ESG constraints on market performance?