What the study found
The study found that hotel-focused real estate investment trusts, or REITs, appear to benefit more financially from higher ESG ratings than REITs in other real estate sectors. The reported gains were driven mainly by capital gains rather than operating income.
Why the authors say this matters
The authors conclude that the findings reinforce sector-specific financial implications of ESG adoption. They also suggest that ESG initiatives in hotel REITs function as firm-specific strategic capabilities, including energy efficiency, governance quality, and social responsibility.
What the researchers tested
The researchers examined whether ESG scores were related to financial performance in global REITs, with particular attention to the hotel sector. They analyzed 5,241 firm-year observations from 37 countries covering 2001 to 2022, using ESG ratings from MSCI and financial data from Bloomberg and Compustat via WRDS.
What worked and what didn't
The analysis reported a stronger positive ESG-performance association for hotel REITs than for REITs focused on other sectors. ESG investment was associated with improved financial returns in hotels, mainly through higher capital gains. The abstract does not report any sector where ESG had a stronger effect than in hotel REITs.
What to keep in mind
The summary provided does not describe specific limitations, so none can be stated here. The results are based on global REIT data from 2001 to 2022 and may apply only within that scope.
Key points
- Hotel-focused REITs showed a stronger financial benefit from ESG improvements than other REIT sectors.
- The reported financial benefit came mainly from capital gains, not operating income.
- The study used 5,241 firm-year observations from REITs in 37 countries between 2001 and 2022.
- ESG scores came from MSCI, and financial data came from Bloomberg and Compustat via WRDS.
- The authors link the pattern to a positive ESG-performance association that is strongest in hotel REITs.
Disclosure
- Research title:
- ESG ratings show stronger financial links in hotel REITs
- Authors:
- Chyi Lin Lee, Jian Liang
- Institutions:
- Queensland University of Technology, UNSW Sydney
- Publication date:
- 2026-07-01
- OpenAlex record:
- View
- Image credit:
- Bernard Gagnon, Wikimedia Commons, CC BY-SA 3.0
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