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JPMorgan Quants Develop Model for Socially Responsible Investing

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In a further sign that socially responsible investing is going mainstream, JPMorgan Chase & Co. have developed a quantitative tool to help investors pick compliant stocks.

Strategists at the firm have built an “ESGQ” quantitative metric that combines a company’s long-term corporate responsibility score with faster-moving data that isolates newsflow on potential controversies. The analysis then tracks momentum in the ESG scores to measure changes in market sentiment and price behavior.