Which of the following statements is false?

The statement indicating that ESG integration at the equity selection level automatically ensures ESG compliance at portfolio and asset allocation levels is considered false because it misrepresents the nature of ESG integration within investment strategies. While integrating ESG factors into equity selection is an essential step in responsible investing, it does not guarantee that the entire portfolio will remain compliant with ESG criteria.

Portfolio management also involves decisions related to asset allocation, diversification, and overall risk management. Even if individual equities are selected based on ESG criteria, other aspects of the portfolio—such as the selection of asset classes, regions, or industries—may not adhere to the same standards. Thus, ESG compliance must be maintained at multiple levels of investment management, rather than assuming that initial equity selection suffices for the entire portfolio.

The other statements, while nuanced, contain aspects that hold true within the framework of ESG investing. The lack of standardized measures (which impacts consensus among investors), the limited academic proof of positive return correlations with ESG integration, and the nature of sub-components of ESG as potentially orthogonal factors are all recognized challenges within the ESG landscape. These components reflect the complexities and evolving understanding of sustainable investing, underscoring the necessity for comprehensive ESG strategies beyond just stock selection.