Advances in Economics, Management and Political Sciences

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Proceedings of the 2nd International Conference on Financial Technology and Business Analysis

Series Vol. 61 , 28 December 2023


Open Access | Article

Can Warren Buffett’s Investment Decisions Independent of ESG? Evidence from Berkshire Hathaway

Ziwei Chang * 1
1 Business School, Univeristy of Sydney, Sydney, NSW 2008, Australia

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 61, 39-46
Published 28 December 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Ziwei Chang. Can Warren Buffett’s Investment Decisions Independent of ESG? Evidence from Berkshire Hathaway. AEMPS (2023) Vol. 61: 39-46. DOI: 10.54254/2754-1169/61/20230733.

Abstract

The past decade has witnessed a growing recognition of ESG (Environmental, Social, and Governance) investing, yet the application of ESG principles within Berkshire Hathaway, under the leadership of renowned investor Warren Buffett, has not been prominently evident. This study seeks to ascertain whether the historical investment decisions made by Buffett's Berkshire Hathaway, seemingly disassociated from active ESG involvement, may have nonetheless been subject to the influence of ESG factors. Employing methodologies encompassing correlation and regression analyses, this research unveils a discernible positive relationship between Berkshire Hathaway's investment quantities and the ESG scores of the invested firms. Moreover, companies demonstrating a positive trajectory in ESG considerations tend to be more aptly enlisted in the subsequent year's investment roster, while those witnessing a decline in ESG scores are prone to exclusion. In a comparative exploration of financial variables and ESG metrics, this study chose profit margin, ultimately revealing that ESG scores exert a notably more pronounced impact on Berkshire Hathaway's investment deliberations, specifically pertaining to share quantities, in contrast to the effect exerted by profit margin.

Keywords

ESG investing, Berkshire Hathaway, Warren Buffett, Correlation, Regression Analysis

References

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
ISBN (Print)
978-1-83558-223-7
ISBN (Online)
978-1-83558-224-4
Published Date
28 December 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/61/20230733
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated