“However, they do outperform the rest of the market when there are unexpected shifts in customers’ tastes for green products and investors’ tastes for green holdings, the authors added.”

[COMMENTARY] I’m unsure with the conclusion that ESG investors settle for lower returns. That might’ve been the case — until fairly recently. I suspect that many new ESG investors are seeing the outperformance of ESG stocks and are buying them for that reason only.
Why ESG Investors Are Happy to Settle for Lower Returns, by Wharton Business School, November 9, 2020, University of Pennsylvania, USA.