This study aims to investigate the impact of various markets—national stocks, bulk commodities and green industries—on Environmental, Social and Governance (ESG) investments before, during and after the COVID-19 pandemic. Using machine learning methodology and SHapley Additive exPlanations (SHAP) analysis, it aims to identify shifts in market contributions to ESG investments across these distinct phases, enhancing our understanding of ESG investments as resilient assets during economic upheavals.
The study applies the XGBoost model to analyze ESG investment data from 2017 to 2024, focusing on SHAP values to interpret the impact of each market segment on ESG investments over time. Markets are divided into subgroups—bulk commodities, national stocks and green industries—allowing for granular analysis of their influence on ESG investments across different economic conditions.
The analysis reveals that valuable and high-scoring ESG assets may act as gold with “safe-haven” characteristics, especially during the COVID-19 pandemic when alignment across markets intensified. During post-pandemic, green industries, particularly solar energy, have become prominent ESG drivers, reflecting a global shift toward sustainability. The study also shows variations in ESG integration across regions, with the USA and EU leading in the performance of ESG investments, while other areas present growth opportunities.
This study fills a gap in ESG literature by analyzing ESG investments across market segments and periods, providing insights into their dynamic relationship with traditional markets. It suggests high-scoring ESG assets’ safe-haven role during market turbulence, akin to gold and offers a comparative analysis of national stocks, identifying regions with growth potential in sustainable practices. The study also emphasizes the post-pandemic rise of green industries, especially solar energy, as future ESG drivers in green industries. These insights support investors and policymakers in integrating ESG strategies and enhancing risk management amid growing sustainability demands.
