Why Green Shipping's Past Returns May Not Predict Its Future

For several years, ESG-labeled investments outperformed the broader market, and green shipping assets rode a version of that same wave. New research from Harvard Business School's Philippe van der Beck suggests investors should be careful about assuming that pattern continues.

Van der Beck's analysis found that ESG funds' historical outperformance — roughly 2.2% annually — came almost entirely from capital inflows pushing up valuations, not from the underlying companies actually performing better. Only about 0.3 percentage points of that outperformance reflected real fundamentals. Every dollar that flowed into ESG investing generated roughly 80 cents of pure price pressure. With ESG fund outflows now running in the tens of billions, that price support is reversing.

For maritime finance professionals, ship investors, and anyone pricing the business case for green retrofits, dual-fuel newbuilds, or sustainability-linked shipping loans, the lesson isn't "stop investing in green shipping." It's "stop assuming the recent premium on green assets is a permanent feature of the market." Van der Beck's own framing is useful here: if the goal is genuine environmental impact — cheaper capital for genuinely sustainable operators — that impact holds regardless of return trends. If the goal was outsized returns riding a green premium, that assumption now needs a harder look.

Recommendations:

• Separate the environmental case for a green investment from the financial return case — evaluate each on its own evidence.
• Don't underwrite a retrofit or green newbuild business case on the assumption that past ESG return premiums will repeat.
• Watch capital flow trends into sustainable shipping funds as a leading indicator, not just emissions or compliance data.
• When advising on sustainability-linked finance, be explicit with stakeholders about which benefit — impact or return — is actually being promised.

Finance and sustainability professionals across the maritime sector are working through exactly this recalibration right now — it's a regular thread of discussion inside the NextMariner community for anyone who wants a second set of eyes on the numbers.