“We have observed a massive mobilisation of institutional investors on ESG,” Amundi wrote in the research.

“This has impacted the supply/demand mechanism with a subsequent effect on stock prices. Even though this concerns European investors more than their American counterparts, North American stocks have also benefited from this high demand because of the significant exposure of some large European institutional investors to North America.”

Europe also continued to lead the world in ESG investing, with European companies providing better returns than their American counterparts.

They found that buying the best-in-class (or 20 per cent best ranked) ESG stocks and selling the worst-in-class (or 20 per cent worst-ranked) ESG stocks would have generated an annualised return of 5.8 per cent in the eurozone, but only 0.6 in North America. 

“Traditional ESG fundamentals are still present with best-in-class and worst-in-class approaches functioning in some areas,” said Thierry Roncalli, head of quantitative research at Amundi. 

“However, ESG investors have integrated dynamic approaches seeking value-added from ESG improvements as well. The ESG integration has therefore become more complex and diverse in its time horizon.”