Environmental, social, and corporate governance (ESG) issues are increasingly gaining attention from all types of stakeholders, ranging from government to media to investors and asset managers. As more asset managers assess ESG exposure, and even use it as a basis for investing, it becomes important to understand and evaluate the degree to which ESG efforts can be maintained, creating long-term value, while reducing risk.

Given some of the concerns in the market that companies that issue earnings guidance focus too much on short-term profits, it would be interesting to see if ESG (environmental, social and corporate governance) scores, which indicate a focus on long-term value, confirm this thesis. This note examines if there is a link between corporate guidance and ESG scores.