Advances in Consumer Research
Issue 2 : 433-443
Original Article
ESG (Environmental, Social, Governance) investment analytics for sustainable portfolio optimization
 ,
 ,
 ,
 ,
 ,
 ,
1
Assistant Professor, Maharaja Agrasen Institute of Management Studies
2
Associate Professor, Bhagwan Parshuram Institute of Technology (BPIT), Affiliated to Guru Gobind Singh Indraprastha University, Dwarka, New Delhi
3
Assistant Professor, Delhi Institute of Advanced Studies (DIAS), Affiliated to Guru Gobind Singh Indraprastha University, Dwarka, New Delhi
4
Assistant Professor, Roorkee Institute of Technology (RIT), Roorkee
5
Assistant Professor, New Delhi Institute of Management (NDIM), Affiliated to Guru Gobind Singh Indraprastha University, Dwarka, New Delhi
6
Associate Professor, Roorkee Institute of Technology (RIT), Roorkee
Abstract

Environmental, Social, and Governance (ESG) investment analytics has matured from screening-based exclusions to integrated, multi-objective portfolio construction that explicitly quantifies sustainability–financial trade-offs. This paper develops a rigorous framework for sustainable portfolio optimization that (1) characterizes ESG data uncertainty and provider divergence, (2) integrates ESG indicators within mean–variance and multi-objective optimization formulations, and (3) leverages machine-learning methods to extract material ESG signals and to enhance return and risk forecasts. We propose an uncertainty-aware ESG penalty term that augments classical mean–variance optimization and show how varying the ESG-aversion parameter produces a continuum from financially-efficient to sustainability-efficient allocations. To account for heterogeneous ESG data and methodological differences across providers, we incorporate ensemble ESG scoring and robust optimization techniques, and we evaluate performance using out-of-sample backtests across multiple markets and time horizons. The framework is extended to a multi-objective evolutionary solver that jointly optimizes expected return, downside risk (CVaR), and aggregated ESG impact metrics, while an explainability module maps portfolio exposures to material E, S, and G drivers. Empirical results indicate that (i) accounting explicitly for ESG uncertainty meaningfully alters allocations, (ii) ML-driven indicator selection improves forecasting accuracy and portfolio ex-post sustainability profiles, and (iii) regulatory developments and methodological biases in ESG scoring critically influence risk–return–sustainability trade-offs. The paper closes with a discussion of implementation challenges, data governance, and directions for future research...

Keywords
Recommended Articles
Original Article
Career Optimism through Career Adaptability and Psychological Capital
...
Original Article
Behavioral Finance Insights Shaping Risk Perception and Investment Decisions in Volatile Financial Markets
...
Original Article
Scholarship On Biomedical and Health Informatics Education
Original Article
Imitation And Simulation: Poetry And the Virtual Worlds of Ai and Social Media
Loading Image...
Volume 3, Issue 2
Citations
115 Views
68 Downloads
Share this article
© Copyright Advances in Consumer Research