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Heriyanto, Heriyanto, Suramaya Suci Kewal, and Yohanes Andri Putranto Bernadus. "SOCIALLY RESPOSIBLE INVESTING (SRI) DAN KINERJA SAHAM." Nominal: Barometer Riset Akuntansi dan Manajemen 8, no. 2 (September 19, 2019): 194–208. http://dx.doi.org/10.21831/nominal.v8i2.26698.
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Abstrak: Socially Resposible Investing (SRI) dan Kinerja Saham Penelitian ini bertujuan ingin menguji secara empiris perbedaan kinerja saham berdasarkan nilai return dan risiko dari perusahaan-perusahaan yang melakukan Social Responsibility Investment (SRI) melalui perhitungan indeks SRI-KEHATI dan Jakarta Islamic Index (JII) dengan Indeks Harga Saham Gabungan (IHSG).Periode pengamatan dalam penelitian iniselama 7 tahun yaitu dari tahun 2010 sampai dengan tahun 2016. Pengujian hipotesis dilakukan dengan teknik analisa yaitu independent sample t-test dengan menggunakan tingkat signifikansi sebesar 5%. Hasil yang diperoleh dari pengujian perbedaan return adalah tidak terdapat perbedaan antara return IHSG dengan return JII, return IHSG dengan return SRI-KEHATI, dan return JII dengan return SRI-KEHATI. Hasil yang diperoleh dari pengujian perbedaan risiko adalah terdapat perbedaan risiko antara risiko IHSG dengan risiko JII, risiko IHSG dengan risiko SRI-KEHATI, dan tidak ditemukan perbedaan antara risiko JII dengan risiko SRI-KEHATI. Kata kunci : socially responsible investing, kinerja saham.
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Chawana, Munyaradzi. "Socially responsible investing returns: Evidence from South Africa, 2004-2012." Journal of Economic and Financial Sciences 7, no. 1 (April 30, 2014): 103–26. http://dx.doi.org/10.4102/jef.v7i1.133.
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A number of researchers have sought to test the theoretical prediction of Modern Portfolio Theory that asserts that Socially Responsible Investing (SRI) under-performs conventional investing. In contrast to the majority of literature, which focuses on comparing SRI funds’ performance to conventional funds, this study compares the performance of South Africa’s JSE SRI Index to the performance of local conventional market indices in the period 2004-2012. Using Sharpe ratios, the results of the study indicate that in comparison to conventional indices, the JSE SRI Index generally exhibits an inferior risk-return trade-off in both bull and bear market conditions. Furthermore, spanning tests based on the single-factor Capital Asset Pricing Model provide evidence that the JSE SRI Index is only likely to earn similar risk-adjusted returns to the Synthetic Conventional Index (a self-constructed index tracking non-overlapping conventional stocks). However, if the assumption of a non-restricted investment universe for a non-socially conscious investor is considered, there is a risk-adjusted return penalty for investing in the JSE SRI Index.
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Cupriak, Daniel, Katarzyna Kuziak, and Tomasz Popczyk. "Risk Management Opportunities between Socially Responsible Investments and Selected Commodities." Sustainability 12, no. 5 (March 5, 2020): 2003. http://dx.doi.org/10.3390/su12052003.
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Socially responsible investing (SRI) or sustainable, responsible, and impact investing is growing fast. The net total of SRI assets at the beginning of 2018 was USD 12.0 trillion. There is extensive literature on SRI, but very little of it relates to portfolio construction and risk management combining SRI and commodities. In this paper, the authors pay attention to model volatility and dynamic conditional correlations between SRI investment and selected representative of commodities. We state the following hypothesis: the potential to create portfolio and risk management opportunities exists between SRI and commodities such as grain, precious metals, and industrial metals. To verify this, modeling of volatility and dynamic conditional correlation (DCC) between pair of elements is necessary. Empirical research conducted for the global market based on selected indices for SRI and commodities confirms this hypothesis. These results can improve asset selection in portfolio construction and allow investors to make more reasonable decisions.
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Dielini, Maryna. "TRENDS IN THE DEVELOPMENT OF SOCIALLY RESPONSIBLE INVESTING IN THE WORLD: THEORETICAL AND PRACTICAL ASPECTS." Economic Analysis, no. 30(1, Part 1) (2020): 74–83. http://dx.doi.org/10.35774/econa2020.01.01.074.
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The subject of this scientific article is the theoretical study of socially responsible investment (SRI) and development in the world and countries of Europe. The purpose of the research is to study the essence of socially responsible investing, its strategies and to analyze statistically the development of socially responsible investing in the world and in Europe in particular. Research methods. The methods of synthesis, analysis, comparison, generalization, statistical data processing, graphical and tabular methods of presentation of scientific results were used. The result of the work is a theoretical and statistical study of the subject of the article. The essence of socially responsible investing is defined as investing in socially responsible entrepreneurships with the purpose of profit. Historical factors of socially responsible investing have been investigated, among which the religious aspect and the increasing importance of human values have been highlighted. Have been described main strategies that investors use in decision-making process about financing companies or projects, outlined their differences and purposes. On the basis of abovementioned, a statistical study was conducted to analyze the overall status of the SRI in the world, what strategies are most represented and to explore more deeply the state of development of SRI in Europe, as the region with the highest volume of SRI. The results of the research can be used by companies that search an outside investor or, conversely, invest in other businesses to understand the request of today’s business society. Taking into account the world experience will allow to increase the company's own image and a positive effect on the society and the environment. Conclusion. Socially responsible investments are gaining ground in the world, as this is required by the global community. Entrepreneurs understand the importance of earning socially responsible profits, which is generated by investing in responsible enterprises and projects.
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Henderson, Gail E. "Making Corporations Environmentally Sustainable: The Limits of Responsible Investing." German Law Journal 13, no. 12 (December 1, 2012): 1412–37. http://dx.doi.org/10.1017/s2071832200017922.
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Almost weekly, it seems, my inbox fills with dozens of academic articles on the topic of “socially responsible investing” or “SRI”. Non-profit organizations across Europe and North America promote SRI as the new investment industry standard. Business schools now offer certificate programs in “sustainable investment”. In 2006, the UN launched the Principles for Responsible Investment (PRI) to provide a framework for investors interested in practicing responsible investing. The PRI now boast over 1,000 signatories, including asset owners and investment managers.
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Revelli, Christophe. "Socially responsible investing (SRI): From mainstream to margin?" Research in International Business and Finance 39 (January 2017): 711–17. http://dx.doi.org/10.1016/j.ribaf.2015.11.003.
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Gunawardena, Asela. "Technopark Planning: Investing in Nanotechnology in Sri Lanka." World Technopolis Review 1, no. 1 (February 10, 2012): 65–70. http://dx.doi.org/10.7165/wtr2012.1.1.65.
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Sule, Ahmed. "MRI and SRI Mutual Funds: A Comparison of Christian, Islamic (Morally Responsible Investing), and Socially Responsible Investing (SRI) Mutual Funds." CFA Digest 37, no. 4 (November 2007): 60–62. http://dx.doi.org/10.2469/dig.v37.n4.4878.
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Bodhanwala, Shernaz, and Ruzbeh Bodhanwala. "Relationship between sustainable and responsible investing and returns: a global evidence." Social Responsibility Journal 16, no. 4 (June 15, 2019): 579–94. http://dx.doi.org/10.1108/srj-12-2018-0332.
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Purpose The purpose of this study is to examine whether sustainable and responsible investing (SRI) outperforms the benchmark index investing across different time frames globally. Design/methodology/approach Based on the systematic weighted environmental, social and governance (ESG) ratings compiled by Thomson Reuters Asset4, the authors assess the stock market performance and risk of highly compliant firms portfolio in seven different countries; grouped as developed and developing nations over different time frames by adopting the Jensen’s alpha model (CAPM) and the Fama and French three-factor model. Findings The study finds that SRI portfolios significantly underperform their benchmark index, in case of, the developing nations, however, enjoy a significantly lower risk. This is contrary to the findings in case of developed nations, where the US SRI portfolio has significantly outperformed the benchmark index and the UK and Australia SRI portfolios have performed in line with the benchmark index. Finally, the study discusses results and implications for regulators, practitioners and investors’ who believe in the SRI investing. Research limitations/implications This study provides empirical support for the practitioners, policymakers and investors emphasizing that in the case of developed nations SRI investments generate a significant excess return or at the best perform in line with the broader market index. However, in the case of developing nations, very few firms are consistently rated on ESG parameters. This provides lesser options for investors in developing nations to apply the “impact first” philosophy of investment. The investor’s community and regulators need to make a serious effort in promoting firms to take up sustainability effort seriously. Originality/value The unique contribution of this study is that it considers a wider definition of the term “sustainability” and examines the performance of SRI investment in developed vs developing countries. This is one of the few studies at the global level, which highlights whether sustainable investing generates abnormal risk-adjusted returns for the investors.
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Jun, Hannah. "Investing Well by Investing for Good?: Exploring the Motivations of Socially Responsible Investors." International Studies Review 14, no. 1 (October 15, 2013): 29–56. http://dx.doi.org/10.1163/2667078x-01401002.
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Investments in socially responsible investing (SRI), an investment process that integrates environmental, social, and governance considerations into investment decisionmaking, have grown rapidly in many areas around the world. But compared to the growth of SRI investments on a global level, there is little clarity in the academic literature about why investors would choose to implement such a strategy. This paper attempts to highlight key theories and approaches to understand the motivetions of socially responsible investors and, in doing so, provide a more robust theoretical framework that underpins the recent global phenomenon.
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Junkus, Joan, and Thomas D. Berry. "Socially responsible investing: a review of the critical issues." Managerial Finance 41, no. 11 (November 9, 2015): 1176–201. http://dx.doi.org/10.1108/mf-12-2014-0307.
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Purpose – The purpose of this paper is to provide a review of the most recent work in major finance journals on socially responsible investment (SRI). While SRI involves individual investors, firms, and investment managers, the authors concentrate primarily on the investment view. Design/methodology/approach – The authors briefly review the development of socially responsible investing (SRI) and the theoretical issues related to SRI and investment choice. This is followed by a review of the empirical results concerning firm value. The question of whether SR mutual funds and SR indexes differ in performance or other characteristics from their conventional counterparts is discussed next, and lastly the authors present suggestions for future research directions. Findings – Despite the large and extensive amount of empirical research published on SRI in recent years, the authors find no definitive answer to the question of SR actions for either the firm or the investor. For firms, evidence linking corporate social responsibility (CSR) rankings with higher value is mixed, and depends on the type of CSR behavior studied as well as the measures of firm performance used. The performance of SR mutual funds and indexes generally are not significantly different from conventional funds or indexes, but again these results are also highly dependent on model specification, time period, benchmark, and other characteristics of the study. Practical implications – The value of SR investing has not been definitely proved. This means, however, that there is room for further on this important topic. Originality/value – This paper synthesizes and presents the most recent research on SRI from a wide variety of refereed sources.
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Cultice, Ryan, and Steven Dolvin. "Do Socially Conscious ETFs Match Their Active Counterparts?" International Business Research 13, no. 4 (March 24, 2020): 100. http://dx.doi.org/10.5539/ibr.v13n4p100.
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Over the past decade, Socially Responsible Investing (SRI) has grown at a rapid pace and, by some estimates, now represents a quarter of the $48 trillion in assets under professional management in the United States. At the same time, investors have broadly shifted from active to passive investing strategies. While there is significant research in each of these respective areas, we believe that we are the first to examine whether a socially conscious investor can employ a passive approach or if the constrained nature of SRI necessitates active management. As such, we examine the performance of socially conscious ETFs versus a matched sample of actively managed SRI mutual funds. We find the performance, as a whole, to be insignificantly different between the two groups, suggesting that the benefits of active management in this construct effectively offset the cost advantage of passive ETFs.
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Thomas, David P. "Critical pedagogy and Socially Responsible Investing (SRI): Questioning our post-secondary institutions’ investment strategies." Learning and Teaching 9, no. 3 (December 1, 2016): 4–21. http://dx.doi.org/10.3167/latiss.2016.090302.
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This article explores the use of critical pedagogy in addressing the important issue of Socially Responsible Investing (SRI) in the postsecondary context. I argue that tools of critical pedagogy – in this case student-centred learning and sharing power in the classroom – provide a productive avenue for post-secondary students to engage with SRI. In addition, analysing current debates and trends in SRI offers an excellent opportunity to encourage active, engaged, student-centred learning, with the ultimate goal of producing citizens who are capable of questioning the world around them. The article presents a case study of a course on SRI at a small liberal arts university in Canada to illustrate the potential of critically teaching and learning about SRI.
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Russo, Angeloantonio, Massimo Mariani, and Francesco Perrini. "Cherry Picking or Depth-Oriented Strategic Investing? Evidence from SRI Activity." International Journal of Business and Management 11, no. 11 (October 26, 2016): 13. http://dx.doi.org/10.5539/ijbm.v11n11p13.
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Today, socially responsible investing (SRI) represents the youngest financial-services industry that investors can exploit to implement their investment strategies. Although literature in this field is growing, additional research is needed to disentangle the factors affecting the performance of SRI funds. This paper focuses on the analysis of the influence that the depth of investment strategy by SRI funds may have on the investment performance, whereas larger SRI funds have a stronger capacity to address their investment choices. We used a sample of 149 USA SRI funds referring to the Social Investment Forum (SIF) Foundation in the period 2005-2010. We found that depth of investment strategy decreases the capacity of large SRI funds to reach positive financial returns if a broad sustainability investment strategy is pursued. On the other hand, SRI funds able to focus the attention on specific environmental, social, governance, or product criteria do increase their capacity to reach positive financial performance. This paper contributes to the existing literature by examining the depth of the sustainability investment strategy by SRI funds and investigating the moderating effect that peculiar investment strategies have on the well-known relation between size and performance of SRI funds. major-bidi;mso-bidi-theme-font:major-bidi;mso-ansi-language:EN-GB;mso-fareast-language: ZH-CN;mso-bidi-language:AR-SA'>This paper analyzes the wealth distribution taking into account the reaction of the market to the alliance as an indicator of a successful strategy. It explores the case of the automobile industry, which is characterised by a high use of inter-firm cooperation, such as strategic alliances and mergers & acquisitions, to effectively compete in the global market and face the global crisis.
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Grim, Douglas M., and Daniel B. Berkowitz. "ESG, SRI, and Impact Investing: A Primer for Decision-Making." Journal of Impact and ESG Investing 1, no. 1 (August 31, 2020): 47–65. http://dx.doi.org/10.3905/jesg.2020.1.1.047.
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De Costa, W. A. J. M. "Climate change research in Sri Lanka – Are we investing enough?" Journal of the National Science Foundation of Sri Lanka 40, no. 4 (December 18, 2012): 281. http://dx.doi.org/10.4038/jnsfsr.v40i4.5041.
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Richardson, Benjamin J. "Socially Responsible Investing for Sustainability: Overcoming Its Incomplete and Conflicting Rationales." Transnational Environmental Law 2, no. 2 (August 13, 2013): 311–38. http://dx.doi.org/10.1017/s2047102513000150.
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AbstractIn the wake of the Global Financial Crisis and worsening collateral social and environmental problems, socially responsible investing (SRI) has garnered more interest internationally as a potential civilizing influence on the financial economy. In particular, SRI is increasingly conceptualized as a means to promote environmentally sustainable development by disciplining financial markets to be more attentive to their ecological impacts. In this sense, SRI emerges as a putative form of transnational governance that utilizes non-state actors and mechanisms to promote sustainability in an economic sector that traditionally has had little accountability for its environmental performance. But as a largely voluntary movement, with rudimentary legal support, SRI so far has wielded limited clout.A hindrance to the aspirations of SRI is deficiencies in its rationales. This article critiques the main theories advanced to justify SRI from the perspective of their contribution to promoting environmental sustainability: the complicity-based doctrine, leverage-based responsibility, and the universal owner thesis. Apart from gaps or limitations shown in each rationale, the article demonstrates that they conflict with the existing parameters of fiduciary law responsibility of financial institutions. An alternative rationale that emphasizes the temporal perspective to invest over the long term is suggested as a better approach for SRI if it is to be relevant to the pressing challenges of promoting sustainability and governing global financial markets.
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Rivoli, Pietra. "Making a Difference or Making a Statement? Finance Research and Socially Responsible Investment." Business Ethics Quarterly 13, no. 3 (July 2003): 271–87. http://dx.doi.org/10.5840/beq200313323.
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Abstract:What does socially responsible investing (SRI) accomplish for investors and for society? Proponents of SRI claim that the practice yields competitive portfolio returns for investors, while at the same time achieving better outcomes for society at large. Skeptics view SRI as ineffective at best and ill-conceived marketing hype at worst. My objective in this paper is to apply mainstream finance research findings to the question of whether SRI may be expected to lead to superior social outcomes. I conclude that under the perfect markets assumptions underlying most finance theory, SRI will not affect social outcomes. However, given well documented imperfections in equity markets, the claim that SRI “makes a difference” to society is a reasonable one that is consistent with current theoretical and empirical research in finance.
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Kiymaz, Halil. "Performance Evaluation of SRI Funds: An Analysis of Fund Types." Accounting and Finance Research 8, no. 1 (February 22, 2019): 212. http://dx.doi.org/10.5430/afr.v8n1p212.
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Socially responsible investing (SRI) continues to get the attention of both practitioners and academicians as the demands for these funds increased sharply during the last decade. This study provides additional evidence on performances of SRI in mutual funds. The empirical findings show that although SRI funds experience lower average returns relative to the non-SRI control sample and various benchmarks, they provide higher returns relative to the control group and benchmarks using various risk adjusted measures. Among the subgroups analyzed, SRI Fixed Income funds offer the highest risk adjusted returns to investors while SRI Global funds provide the lowest returns. Finally, using Jensen’s alpha for individual funds, we find that about half of the funds experience negative alphas and 20 percent of SRI funds have statistically significant negative alphas compared to 7 percent of funds with that of positive alphas. Overall, the findings show mixed results concerning SRIs performance.
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Barom, Mohd Nizam. "Understanding Socially Responsible Investing and Its Implications for Islamic Investment Industry." Journal of Emerging Economies and Islamic Research 7, no. 1 (January 31, 2019): 1. http://dx.doi.org/10.24191/jeeir.v7i1.6015.
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Understanding Socially Responsible Investing and Its Implications for Islamic Investment Industry
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Social, ethical and environmental concerns have been used as important consideration for investment decision by an increasing number of investors. This can be seen by the size and growth of the socially responsible investment (SRI) industry in the developed economies. At the same time, scholars and commentators of Islamic finance have also called for Islamic investment industry to learn from the experience of SRI in incorporating social responsibility issues in the investment process, in line with the ethical principles of Islam and the overall objective of the Shari’ah (Maqasid al-Shari’ah). This would require Islamic investment sector to have a clear understanding of the SRI industry in order to effectively benefit from its experience. This is particularly critical due to the significant diversity of investors and complexity in the issues and strategies adopted in the SRI industry. Hence, this paper adds to the Islamic investment literature by providing an extensive and systematic survey of SRI industry in terms of its (i) underlying motivations and values; (ii) issues of concerns; (iii) types of investors; and (iv) screening strategies. It then synthesizes these components within the context of the ‘value-based’ investors. This synthesized framework offers a useful tool for Islamic investment practitioners to understand the theoretical and practical aspects of SRI. Subsequently, the paper highlights important implications of the findings for Islamic investment industry in terms of the issues that it needs to consider in emulating SRI practices and a number of lessons that it can learn from the SRI experience.
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Risi, David. "Time and Business Sustainability: Socially Responsible Investing in Swiss Banks and Insurance Companies." Business & Society 59, no. 7 (May 31, 2018): 1410–40. http://dx.doi.org/10.1177/0007650318777721.
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Business sustainability aims to combine market logic with social welfare logic. In literature, it is commonly assumed that sustainability and the social welfare logic associated with it are characterized by a long-term orientation. However, this assumption is problematic because this principle may not apply in certain contexts. This qualitative study challenges this assumption and focuses on the mechanisms by which time affects the adoption of sustainability practices in the context of socially responsible investing (SRI) practices in Swiss banks and insurance companies. The article provides insights into the mechanisms associated with different time horizons and investigates their effects on the adoption of SRI in financial intermediaries. It also shows how the dimension of time shapes interactions between the two institutional logics underlying SRI in business organizations through specific mechanisms.
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Budsaratragoon, Pornanong, and Boonlert Jitmaneeroj. "Fund Ratings of Socially Responsible Investing (SRI) Funds: A Precautionary Note." Sustainability 13, no. 14 (July 6, 2021): 7548. http://dx.doi.org/10.3390/su13147548.
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We examine fund ratings of socially responsible investing (SRI) equity funds in emerging and developed markets by validating the assumptions of the equally weighted U.S. News mutual fund scorecard and the causal interrelations among its rating agencies—Morningstar, Lipper, Zacks, CFRA and TheStreet—for improvement priorities. In so doing, we apply a novel interdisciplinary methodology including cluster analysis, classification analysis, partial least squares structural equation modeling and importance performance analysis. We find evidence against the U.S. News assumptions, as individual rating agencies have unequal effects and exhibit the causal relationships among one another. We suggest emerging (developed) market fund managers allocate their resources—which are often limited—with the first priority to improving fund ratings of CFRA (Zacks), followed by Zacks (CFRA), TheStreet (Lipper), Lipper (Morningstar) and Morningstar (TheStreet). The positive causal relationships among rating agencies indicates that investors consider multiple rating agencies of the U.S. News for investment decisions, rather than simply use any single one of these rating agencies or their equally weighted aggregation. Interestingly, we find disagreement among rating agencies, with Zack (TheStreet) displaying rating deflation for emerging (developed) market funds. Disagreement among rating agencies may increase the monitoring effort of fund managers who usually “shop” for additional ratings in the hope of maximizing their average ratings.
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Strauß, Nadine. "Communicating Sustainable Responsible Investments as Financial Advisors: Engaging Private Investors with Strategic Communication." Sustainability 13, no. 6 (March 13, 2021): 3161. http://dx.doi.org/10.3390/su13063161.
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Although sustainable responsible investing (SRI) has increasingly become popular on the financial markets, the potential of raising capital from private investors for sustainable development has not been efficiently seized thus far. The lack of knowledge and training about SRI by financial advisors has often been identified as one of the main reasons for this investment gap. In order to accelerate the role of financial advisors as change agents for SRI, this study proposes several strategic communication interventions that advisors could employ in their advisory talks to raise more attention and engagement among private investors for SRI. The interventions proposed are oriented on the 5A model of SRI decision making by Herwig Pilaj and drawn from an interdisciplinary literature review on sustainability, communication, and attitudinal and behavioral change. The results provide a perspective and practical guide for financial advisors on how to effectively communicate SRI to private investors. Limitations and areas future research are discussed.
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Ngwakwe, Collins C., and Fulufhelo G. Netswera. "The corporate response to the socially responsible investment (SRI) index of the Johannesburg stock exchange (JSE)." Corporate Ownership and Control 12, no. 1 (2014): 399–405. http://dx.doi.org/10.22495/cocv12i1c4p3.
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This paper examines the trend in corporate response to the social responsible investing index (SRI) of the Johannesburg Stock Exchange (JSE). The motif of the paper is to discover how and if SRI drives corporates towards public declaration of their social responsible investments. The approach is archival with a descriptive and quantitative analysis of data drawn from the Johannesburg Stock Exchange. Descriptively, we charted a trend of the rate at which the JSE firms join the JSE SRI Index, and our findings indicate an upward trend from 2004 to 2013. Quantitatively, we examined the likely difference in corporate climate disclosure before and after the introduction of the Code for Responsible Investing in South Africa (CRISA). Our findings – using a T-Test of difference in means, indicate a significant difference in means, which apparently show that the CRISA may have added further impetus to corporate climate disclosure. In 2013, the JSE SRI deepened its stringency in measuring corporate responsible claims by assessing only the publicly available responsible information of corporations for inclusion in its SRI index. We thus evaluate possible difference in climate disclosure before and within the year of the new stringent criteria of measurement. Our second T-Test of difference in means also shows a significant difference in means, which signal that corporations exerted extra efforts in making the extent of their climate responsibility publicly available. We conclude that the JSE SRI, coupled with the CRISA motivates firms to improve on their public disclosure. We also conclude that the carbon disclosure project (CDP) is adding pragmatic momentum on the activities of JSE firms to strive towards their improvement in climate performance. Thus voluntary codes and indexes, in the absence of binding regulations, could spur corporate social and environmental initiative in a developing country
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Demetriades, K., and C. J. Auret. "Corporate social responsibility and firm performance in South Africa." South African Journal of Business Management 45, no. 1 (March 31, 2014): 1–12. http://dx.doi.org/10.4102/sajbm.v45i1.113.
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Corporate Social Responsibility (CSR) can be viewed from two different perspectives: that of the business; and that of the individual investor (Socially Responsible Investing, SRI). In this study regression analysis as well as an event study was used to examine the link between CSR and firm performance. The results suggested that in the short-term there were no significant price effects on the SRI shares. In contrast, the returns of SRI portfolios over the sample period seemed to be superior to those of conventional firms. The regression analysis found that generally the SRI coefficients were insignificant; however using one of the models during the fifteen year sample period, SRI constituents attained a ROE that was 11.18% higher (as well as a ROA that was 1.824% lower) than conventional firms. When the period was restricted to 2004-2009 it was found that social performance was positively - and sometimes significantly - correlated with ROE.
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Richardson, Benjamin J. "Sovereign Wealth Funds and Socially Responsible Investing: An Emerging Public Fiduciary." Global Journal of Comparative Law 1, no. 2 (2012): 125–62. http://dx.doi.org/10.1163/2211906x-00102001.
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The dramatic growth of sovereign wealth funds (SWFs) in recent decades has made them a significant phenomenon in global financial markets and raised the prospect of more enlightened investing that respects the environmental underpinnings of economic prosperity. Until the Global Financial Crisis of 2008, the movement for socially responsible investing (SRI) had been the only noteworthy dissenting voice to the traditional complacency about the financial economy’s wider impacts. That financial calamity not only unveiled a systemic malaise in the financial alchemy of the global economy but also highlighted its social and environmental sequelae. The rise of SWFs, several of which are legally mandated to practice SRI, gives hope that states may reclaim some public oversight over finance capitalism. The purpose of this article is to investigate the governance of some SWFs with a view to assessing their capacity to contribute to environmental sustainability. As public financial institutions empowered by a broader conception of investment that takes account of social and environmental factors, SWFs have the incipient markings of ‘public fiduciaries’. SWFs could provide a novel way to interpolate the public trust environmental responsibilities of the state into the governance of the financial economy. This article focuses on the French and Norwegian SWFs, which arguably have the most comprehensive SRI practices of all SWFs. Both, however, have struggled to reconcile their ethical and financial mandates into a coherent investment philosophy. But their putative fiduciary responsibilities to society through an increasingly long-term investing perspective suggest a new normative direction to reconcile these tensions and to thereby help institutionalize the principles of intergenerational equity and sustainable development in the context of financial markets.
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Śliwiński, Paweł, and Maciej Łobza. "Financial Performance of Socially Responsible Indices." International Journal of Management and Economics 53, no. 1 (March 1, 2017): 25–46. http://dx.doi.org/10.1515/ijme-2017-0003.
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Abstract This article analyzes rate-of-return and risk related to investments in socially responsible and conventional country indices. The socially responsible indices are the DJSI Korea, DJSI US and Respect Index, and the corresponding conventional country indices are the Korea Stock Exchange Composite KOSPI, Dow Jones Industrial Average and WIG20TR. We conclude that investing in the analyzed SRI indices do not yield systematically better results than investing in the respective conventional indices, both in terms of neoclassical risk and return rate. This finding suggest that socially responsible investing should be assessed in terms of behavioral economics related to the psycho-social features of investors, rather than to simplified rational choices (based only on the risk and return rate analysis) that neoclassical economics assumes.
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Gottschalk, Ricardo. "Can It Be Both Economically and Morally Rewarding to Invest in Developing Countries?" Global Economy Journal 5, no. 2 (June 6, 2005): 1850035. http://dx.doi.org/10.2202/1524-5861.1039.
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This paper argues that investing in developing countries can be both economically and morally very rewarding. It firstly shows that historically capital invested in developing countries has obtained higher returns than invested in developed countries. It secondly argues that there is also a moral case for investing in developing countries. It would accelerate economic development in the poorer areas of the world, thereby promoting global development. It finally suggests that the socially responsible investment (SRI)initiative could be broadened to incorporate development objectives more explicitly, thereby serving as a conduit to more investment to the developing world.
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Praseeda, Challapalli. "Socially Responsible Investment, Microfinance and Banking: Creating Value by Synergy." Indian Journal of Corporate Governance 11, no. 1 (June 2018): 69–87. http://dx.doi.org/10.1177/0974686218769200.
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Socially responsible investing (SRI) is fast catching the imagination of the ever increasing social consciousness of the investor community. Emergence of SRI can be traced back to the 1970s to few socially conscious investors who wanted to invest in bonds other than war, arms and ammunition and alcohol. Traditionally, SRI has focused on the economic social and governance (ESG) areas. Dieckmann (2007) who authored; Microfinance an emerging investment opportunity as a part of the Deutsche Bank Research, indicates that the SRI sector is witnessing the emergence of novae entrants like the microfinance (MF). The report also states that MF is scanning the environment for new funding opportunities by securitising MF opportunities and moving to the extent of going public. The scenario suggests microfinance to be robust, low risk profiled and growing investment avenue, which is fast emerging in the field of SRI. The purpose of the present article is to explore into the different dimensions of this emerging phenomenon and understand the emerging opportunities for banks in creating value using the synergy of SRI and MF.
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Viviers, S., and N. S. Eccles. "35 years of socially responsible investing (SRI) research: General trends over time." South African Journal of Business Management 43, no. 4 (December 31, 2012): 1–16. http://dx.doi.org/10.4102/sajbm.v43i4.478.
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This article describes 35 years of academic research into investment practices that in some way integrate a consideration of environmental, social and corporate governance issues. A review of 190 academic papers was undertaken to identify trends in five domains, namely ‘Primary Name’, ‘Research Themes’, ‘Ethical Foundations’, ‘Research Approach’ and ‘SRI Strategies’. The evidence reveals that more than half the researchers refer to such investment practices as Socially Responsible Investing (SRI) and for this reason the name is used in this review as a generic term for the genre. A myriad of other names were also identified. In terms of research themes, one particularly dominant theme was that of financial performance, which was often discussed in relation to fiduciary responsibility and legal aspects. Although the primary ethical foundation was not always directly observable, the majority of papers implied utilitarianism or ‘the greatest good for the greatest number’. Increased mention of ethical egoism (self-interest) is observed in later periods. An equal split between qualitative and quantitative research methodologies was noted, with a qualitative approach being more favoured in recent years. Three SRI strategies have dominated academic discussions over the past 35 years, namely negative screening, positive screening and shareholder activism. Gaps in the literature have been identified and suggestions for future research made.
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Jun, Hannah. "Corporate governance and the institutionalization of socially responsible investing (SRI) in Korea." Asia Pacific Business Review 22, no. 3 (January 12, 2016): 487–501. http://dx.doi.org/10.1080/13602381.2015.1129770.
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Townsend, Blaine. "From SRI to ESG: The Origins of Socially Responsible and Sustainable Investing." Journal of Impact and ESG Investing 1, no. 1 (August 31, 2020): 10–25. http://dx.doi.org/10.3905/jesg.2020.1.1.010.
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Geczy, Christopher C., Robert F. Stambaugh, and David Levin. "Investing in Socially Responsible Mutual Funds." Review of Asset Pricing Studies 11, no. 2 (February 11, 2021): 309–51. http://dx.doi.org/10.1093/rapstu/raab004.
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Abstract We construct optimal portfolios of mutual funds whose objectives include socially responsible investment (SRI). Comparing portfolios of these funds to those constructed from the broader fund universe reveals the cost of imposing the SRI constraint on investors seeking the highest Sharpe ratio. This SRI cost crucially depends on the investor’s views about asset pricing models and stock-picking skill by fund managers. To an investor who strongly believes in the CAPM and rules out managerial skill, that is, a market index investor, the cost of the SRI constraint is typically just a few basis points per month, measured in certainty-equivalent loss. To an investor who still disallows skill but instead believes to some degree in pricing models that associate higher returns with exposures to size, value, and momentum factors, the SRI constraint is much costlier, typically by at least 30 basis points per month. The SRI constraint imposes large costs on investors whose beliefs allow a substantial amount of fund-manager skill, that is, investors who heavily rely on individual funds’ track records to predict future performance. ( JEL G11, G12, C11) In 2005, when we released what ultimately proved to be the final version of this study, socially responsible investment (SRI) had already become a major presence on the investment landscape. In the years since, this approach, now often called “sustainable” investment, has grown even more rapidly and often encompasses a broad set of “ESG” (environmental, social, and governance) criteria. As evidence of the rapid growth, Morningstar (2020) notes, “one need look no further than the nearly fourfold increase in assets that flowed into sustainable funds in the United States in 2019.” Sustainable investing has also received increased attention in the academic literature, in subsequent studies too numerous to list. Some of the studies are especially related to ours in that they also examine mutual funds. In our study, mutual funds constitute an asset universe faced by an investor imposing an SRI/ESG constraint. A number of the subsequent studies use mutual funds to address other dimensions of sustainable investing. For example, Bollen (2007), Benson and Humphrey (2008), Renneboog, Ter Horst, and Zhang (2011), Bialkowski and Starks (2016) and Hartzmark and Sussman (2019) investigate determinants of mutual fund flows into sustainable funds versus other funds. Riedl and Smeets (2017) use survey and experimental data to explore investors’ preferences for sustainable funds. Madhavan et al. (2020) examine sustainable active equity mutual funds, relating factor loadings and residual returns to ESG characteristics. While we focus on mutual funds, our study also intends that the basic aspects of the SRI setting extend to other institutional investors. That intent is supported, for example, by the recent evidence of Bolton and Kacperczyk (forthcoming, 2020) providing broader perspectives on the SRI portfolio tilts of various types of institutional investors.One conclusion of our study is that an SRI/ESG constraint is especially binding for investors wishing to tilt toward value or small-cap funds. It seems reasonable to infer that such is still the case, though we have not updated our formal analysis. For example, Morningstar (2020) identifies, as of 2019, 99 sustainable U.S. equity funds categorized within its 3 × 3 style box that sorts along the dimensions of value/blend/growth and small/mid-cap/large. Of those 99 funds, only 8 are classified as value, versus 24 as growth and 67 as blend. Only 7 of the 99 are small-cap funds, versus 79 large-cap and 13 mid-cap. More generally, our 2005 study is early in noting meaningful differences in factor loadings between sustainable versus other funds, in both three- and four-factor models.An SRI/ESG constraint is also especially binding for investors who see much information in individual funds’ historical alphas. The basic reason we discuss in our study is seemingly still at work. That is, despite the rapid growth noted earlier, the number of sustainable funds is still well less than those in the total fund universe, so many of the highest track records appear among funds outside that subset. Not mentioned in our original study is that the case of an investor who sees much information in historical alpha confronts the argument of Berk and Green (2004): if fund flows rationally respond to historical alpha, an investor will not view historical alpha as being informative about future alpha. That argument relies on investors correctly assessing the degree of fund-level decreasing returns to scale. One might view an investor who sees historical alpha as informative about future alpha as also having beliefs that favor a lower degree of decreasing returns to scale, as compared to other investors. Moreover, the equilibrating effects of fund flows might interact with the nonpecuniary utility that SRI-conscious investors derive from their fund choices, as suggested by the evidence of Bollen (2007) that flows respond to returns differently for SRI funds versus conventional funds. In any event, when prior beliefs admit substantial information from historical alphas, Busse and Irvine (2006) find that Bayesian predictive alphas computed as in Pástor and Stambaugh (2002a, 2002b), as are the alphas in our study, do predict future performance.While not one we address, a question often asked is whether sustainable investments perform better or worse than other investments. A number of studies do pursue this question, obtaining a range of findings that include both higher and lower performance for sustainable investments. Pástor, Stambaugh, and Taylor (forthcoming) discuss the challenge in interpreting such findings’ implications about expected future performance. A wedge between ex ante and ex post performance of sustainable investments arises during any period that witnesses unanticipated shifts in either customers’ demands for sustainable products or investors’ demands for sustainable holdings.1 As those authors note, sorting out such effects is an important challenge for future research. Our study conducts its analysis under a variety of asset pricing models and prior beliefs. In each case, an investor conditions on funds’ past returns and thus takes account of any historical performance differences between the sustainable funds and other funds in our sample. We do not, however, include models in which expected asset returns depend on sustainability. In this respect, our study does not attempt to provide direct evidence about a potential relation between sustainability and expected investment performance.We are grateful to the Review of Asset Pricing Studies for the opportunity to publish our original study, which follows below with only the references updated to reflect subsequent publications. The study’s abstract is also unchanged from its original version.
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Hermawan, Tri Wisnu, and Purwohandoko Purwohandoko. "Analisis Pengaruh Inflasi, Nilai Tukar Rupiah, BI Rate, Jumlah Uang Beredar, dan Indeks Shanghai Stock Exchange terhadap Indeks Sri Kehati di Bursa Efek Indonesia Periode 2014-2019." Jurnal Ilmu Manajemen 8, no. 4 (July 29, 2020): 1338. http://dx.doi.org/10.26740/jim.v8n4.p1338-1352.
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This study is to explain the analysis of the influence of inflation, exchange rates, BI Rate, money supply, and Shanghai Stock Exchange index toward the Sri Kehati index on the Indonesia Stock Exchange (BEI) for the period 2014-2019. Data were analyzed by using multiple linear analysis techniques and use SPSS 18 as statistical analysis software. The sample type used is saturation samples so that there are 72 data taken monthly from 2014-2019. The results of this study indicate that inflation and exchange rate have a significant negative relationship to the Sri Kehati index. Meanwhile, the Shanghai Stock Exchange index has a significant positive relationship with the Sri Kehati index. The rest variable BI rate and money supply have no significant relationship to the Sri Kehati index. All independent variables simultaneously affect the Sri Kehati index. Based on the calculation the Adjusted R square value is 0.279 which means that the movement of the Sri Kehati index is influenced by 28% by the variables in this study and 72% is explained by other variables outside this study. Therefore, further research is expected to add other potential independent variables. The implication from this research is that investors should pay more attention to the exchange rate, inflation, and the Shanghai Stock Exchange index before investing in the Sri Kehati index.
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Richardson, Benjamin J. "The Evolving Marketscape of Climate Finance." Climate Law 4, no. 1-2 (July 25, 2014): 94–106. http://dx.doi.org/10.1163/18786561-00402008.
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An important dimension of international and national climate governance is the financial sector. Climate finance refers to the role of financial institutions in addressing climate change, such as through investment transactions, identifying financial risks and supporting clean and green energy developments. Global financial markets have become a significant driver of environmental pressure, but also potentially a means of leveraging positive change. The latter role is expressed through the growing movement for socially responsible investing (sri). This article examines how the financial industry affects action on climate change, the role of the sri movement in improving environmental behaviour, and the place of state-based regulation in creating a more conducive “marketscapeˮ for climate finance.
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COX, PAUL, and MARGUERITE SCHNEIDER. "GLOBAL SOCIALLY RESPONSIBLE INVESTING: THE SRI OF US PENSION PLANS IN THE UK." Academy of Management Proceedings 2006, no. 1 (August 2006): D1—D6. http://dx.doi.org/10.5465/ambpp.2006.27182150.
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Findlay, Suzanne, and Michael Moran. "Purpose-washing of impact investing funds: motivations, occurrence and prevention." Social Responsibility Journal 15, no. 7 (October 7, 2019): 853–73. http://dx.doi.org/10.1108/srj-11-2017-0260.
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Purpose As an emerging field of financing, impact investing is under-institutionalised and is in a legitimacy building phase. In an attempt to unpack how impact investing is deployed in global markets, the key elements of its definition (intentionality, returns and measurement) are examined through a review of academic and practitioner literature. A refined definition is developed which emphasises the key elements of intentionality and measurement as separating impact investment from the established field of socially responsible investment (SRI). Design/methodology/approach Funds and products from a publicly available database are systematically analysed against the refined definition to determine the rigour with which intentionality and measurement are applied by self-identified market participants. These elements are used as a proxy to determine “purpose-washing” – a process where funds are presented as impact investments but do not satisfy a tightly applied definition. Purpose-washing enables the possibility of “retrofitting”, where funds originally defined as other products (e.g. SRI) retrospectively claim to be impact investments. Findings Having found evidence of purpose-washing but not retrofitting, actions are identified to enhance impact investment’s integrity, focussing on intentionality, measurement and transparency. Clarity of definition and purpose are important for a field in the market-building phase, as a lack of clarity could have negative implications for integrity and growth. The authors postulate that purpose-washing may be attributed to twin but distinctive motivations by market participants: interest in fee-generation among fund managers and attempts to bolster field legitimacy by demonstrating sector growth among impact investing proponents. Originality value This paper represents a unique analysis of impact investments against a robust and refined definition. By doing so, it offers a systematic appraisal of impact investments and an overall assessment of market integrity in its field-building phase.
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Khan, Inam Ullah. "Islamic Bonds (Sukuk) in Malaysia." ICR Journal 6, no. 4 (October 15, 2015): 489–508. http://dx.doi.org/10.52282/icr.v6i4.299.
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This article introduces the various types of sukuk that exist in the Malaysian secondary market. The Malaysian sukuk market was initially debt-based which attracted criticism from the Shariah scholars from the Gulf and Middle East. However, the Malaysian sukuk market made a turn towards equity and ijarah sukuk and ventured into “green sukuk” or socially responsible investment (SRI) sukuk. To facilitate the financing of sustainable and responsible investment initiatives, the Securities Commission of Malaysia (SC) has launched the Sustainable and Responsible Investment (SRI) sukuk Framework in 2014. The introduction of the SRI sukuk framework is seen to be in line with the rising trend of “green bonds” and “social impact bonds” that have been introduced globally to facilitate and promote sustainable and responsible investing. The writer has presented different examples from both regions to show that the gap has been bridged. However, despite this convergence the author recommends a revisit of the controversial debt-based instruments by Malaysian Shariah scholars.
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Oxana, Wieland. "Market Conditions for Impact Investments as a Subsidiary of the Social Finance Model." International Journal of Financial Accountability, Economics, Management, and Auditing (IJFAEMA) 3, no. 4 (July 26, 2021): 434–40. http://dx.doi.org/10.52502/ijfaema.v3i4.111.
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In this paper, the author presents an overview of the development of socially oriented impact investing in country-specific markets as a development of the social finance model. This analysis focuses on socially responsible investing (SRI) or impact investing, which has experienced continuous growth in certain countries, including European (UK, particular Scandinavian) and US markets. The equity of social impact mutual fund markets has grown both in the number of funds and in the differentiation of the securities under the social finance model.
Despite the fact that socially responsible investments or impact investments still lack a uniform definition under social finance, it mainly refers to investments that emphasize social/ecological/ethical value over monetary return. In the academic literature, it is not clear whether the behavior of impact investors will be sustainable toward the social finance paradigm, as their investment decision about the monetary return should be motivated by their economic behavior. The author analyzes the economic conditions of the capital market that provide long-term institutional support for socially oriented investments.
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Paul, Karen. "The effect of business cycle, market return and momentum on financial performance of socially responsible investing mutual funds." Social Responsibility Journal 13, no. 3 (August 7, 2017): 513–28. http://dx.doi.org/10.1108/srj-09-2016-0154.
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Purpose This study examines the effect of business cycle, market return and momentum on the financial performance of socially responsible investing (SRI) mutual funds using data from two complete business cycles as defined by the National Bureau of Economic Research (NBER). Design/methodology/approach A “fund of funds” approach is used to identify the extent to which SRI financial performance is affected by the macroeconomic climate. The Fama-French Three-Factor model and the Carhart four-factor model are used to bring the results into alignment with commonly used finance methodologies. Findings The results indicate that SRI tends to preserve value during economic contraction more than it adds value during economic expansion. Market return is important during both expansion and contraction, while momentum is important only during expansion. Research limitations/implications These findings suggest that double screening, for both financial and social performance, enables portfolio managers of SRI funds to have insight into those companies that are particularly vulnerable during times of economic contraction. Practical implications These results bring added clarity to the mixed findings found by previous researchers examining the relationship between corporate social performance (CSP) and financial performance. Social implications This study reinforces the idea that the financial performance of companies with high ethical standards is comparable to the financial performance of the market as a whole during times of economic expansion and superior to the market as a whole during times of economic contraction. Originality/value Business cycle analysis, along with the Fama-French Three-Factor model and the Carhart four-factor model, brings SRI research more into the realm of conventional financial analysis than previous studies.
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Yan, Shipeng, Fabrizio Ferraro, and Juan (John) Almandoz. "The Rise of Socially Responsible Investment Funds: The Paradoxical Role of the Financial Logic." Administrative Science Quarterly 64, no. 2 (April 12, 2018): 466–501. http://dx.doi.org/10.1177/0001839218773324.
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Socially responsible investing (SRI) is gaining traction in the financial sector, but it is unclear whether the dominant financial logic complements or competes with the social logic in the founding of SRI funds. Based on insights we gained from observation at an Asian SRI industry association, interviews with SRI professionals in the U.S. and Europe, and other fieldwork, we questioned explanations for SRI’s conflicted relationship with the financial logic. Our observations prompted us to build a panel database of SRI fund foundings from 1970 to 2014 in 19 countries so that we could examine how a dominant logic interacts with alternative logics to promote or stifle institutional change. We decomposed the financial logic into interdependent dimensions as the provider of means (resources, practices, and knowledge) for novel financial ventures to be founded and the enforcer of profit-maximizing ends that constrain such foundings. Our theory suggests a paradoxical role for the financial logic, which explains an intriguing empirical finding: the founding of SRI funds has a curvilinear, inverted-U-shaped relationship with the prevalence of the financial logic. We propose and find that the relationship between the dominant financial logic and the social logic of SRI shifts from complementary to competing as the financial logic becomes more prevalent in society and its profit-maximizing end becomes taken for granted. We examined how certain alternative logics—those of unions, religion, and green political parties—moderate these effects. Our results shed light on how and to what extent institutional change can occur in fields in which one institutional logic is dominant. They also reveal country-level institutional factors that drive SRI.
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Revelli, Christophe. "Re-embedding financial stakes within ethical and social values in socially responsible investing (SRI)." Research in International Business and Finance 38 (September 2016): 1–5. http://dx.doi.org/10.1016/j.ribaf.2016.03.003.
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Revelli, Christophe, and Jean-Laurent Viviani. "Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis." Business Ethics: A European Review 24, no. 2 (August 15, 2014): 158–85. http://dx.doi.org/10.1111/beer.12076.
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Pérez-Gladish, Blanca, Paz Méndez, and Bouchra M’Zali. "Ranking Socially Responsible Mutual Funds." International Journal of Energy Optimization and Engineering 1, no. 2 (April 2012): 59–84. http://dx.doi.org/10.4018/ijeoe.2012040104.
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Socially Responsible Investing (SRI), also known as sustainable or ethical investing, corresponds to an investment practice that takes into account not only the usual return-risk criteria, but also other non-financial dimensions, namely in terms of environmental, social and governance concerns. Recently, given the causes of the 2008 financial crisis, these concerns became even more relevant. However, while a diverse set of models have been developed to support investment decision-making based on financial criteria, models including also socially responsible criteria are rather scarce. The main objective of this paper is to contribute to try fulfilling this gap on the financial literature, suggesting a Multicriteria Decision Making tool which allows individual investors to analyze and rank socially responsible mutual funds based on their environmental, social and governance performance and taking into account the individual, subjective, personal preferences of each investor.
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Jun, Hannah, Hyojin Kim, and Songhee Han. "Recent Innovations in Socially Responsible Investing (SRI): The Role of “Socially Responsible Bonds” in Spurring Sustainable Development." International Studies Review 19, no. 1 (October 19, 2018): 27–47. http://dx.doi.org/10.1163/2667078x-01901002.
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While it has become clear that the global community needs to utilize partnerships between the public and private sectors to achieve broader economic and development goals, there has been less discussion about the potential role of investors in shaping and participating in this movement. Part of this may be due to familiarity with traditional methods such as official development assistance (ODA) and relatively less understanding about recent innovations in socially responsible investing (SRI), including social impact bonds and development impact bonds. As economies like Korea have begun to show greater interest in harnessing various investment strategies to achieve broader social goals, we find it critical to better understand what financial tools are available within the context of encouraging sustainable development. As such, this paper highlights the potential role investors can play in contributing to broader social issues both at home and abroad through an examination of recent innovations in SRI – specifically, the category of so-called “socially responsible bonds.”
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Mikołajek-Gocejna, Magdalena. "The Environmental, Social and Governance Aspects of Social Responsibility Indices – A Comparative Analysis of European SRI Indices." Comparative Economic Research. Central and Eastern Europe 21, no. 3 (September 18, 2018): 25–44. http://dx.doi.org/10.2478/cer-2018-0017.
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An increasing number of investors want to invest their capital not only with profit but also responsibly, and they pay significant attention to the formula of socially responsible investing (SRI), which means that they consciously engage their funds in companies operating in accordance with CSR principles. An important influence on the development of CSR is the role of stock exchange indices on socially responsible companies. These indices can be considered specific tools for adapting this concept in practice, in particular in the field of socially responsible investment. This article provides a comparative analysis of the social, environmental and governance criteria underlying the definition of the composition of selected European SRI indices. The research will cover the following indices: the DJSI Europe Index, the FTSE4Good Europe 40, the FTSE4Good Europe 50, the EURO STOXX Sustainability 40 and the Solactive Sustainability Index Europe. This paper also intends to set an index reflecting the degree to which companies of certain European countries are represented in major European SRI indices. Consequently, global and national initiatives and ratings were excluded, as well as sector‑and industry‑specific initiatives and ratings. The proposed index is standardized by introducing the GDP of each country into the calculation formula as a way to a achieve comparable result. We believe that the proposed metric will reflect the state of the art in SRI and provide an overall picture of SRI practices across nations.
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Leite, Paulo, and Maria Céu Cortez. "The performance of European SRI funds investing in bonds and their comparison to conventional funds." Investment Analysts Journal 47, no. 1 (January 2, 2018): 65–79. http://dx.doi.org/10.1080/10293523.2017.1414911.
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Noordin, Nazrul Hazizi, Siti Nurah Haron, Aznan Hasan, and Rusni Hassan. "Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan." Journal of Islamic Accounting and Business Research 9, no. 3 (May 8, 2018): 415–33. http://dx.doi.org/10.1108/jiabr-02-2016-0024.
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PurposeThe purpose of this study is to provide a critical review on how the Khazanah’s Sukuk Ihsan was structured in compliance with the requirements for issuance of Sustainable and Responsible Investment (SRI) sukuk set by the Securities Commission (SC) Malaysia. Design/methodology/approachTo explain the structures and features of the Sukuk Ihsan, this study extracted important information from the sukuk’s Principle Terms and Conditions and Information Memorandum and presented them in a simple and easy-to-understand way. Next, this study refers to Part D: Requirement for Issuance, Offering or Invitation to Subscribe or Purchase Sustainable and Responsible Investment Sukuk of the SC’s Guidelines on Sukuk (revised edition: 28 August 2014) to assess the compliance of the sukuk in terms of eligibility of SRI sukuk issuer and SRI projects, use of proceeds, reporting and disclosure and independent assessment on SRI programmes. In addition, this study then compares the requirements stated in the SC’s SRI Sukuk Framework with the International Capital Market Association’s Green Bond Principles (GBP) and the USA’s Social Impact Bond (SIB) Act 2014. FindingsThe present study finds that the definition of eligible SRI sukuk issuer in the Guidelines on Sukuk seems to be more stringent compared to the one provided in the GBP and the US’ SIB Act. Nevertheless, the SRI Sukuk Framework provides a more comprehensive yet precise list of eligible SRI projects, covering both environmental and social aspects, compared to the GBP (which only focuses on broad categories of environmental projects) and also the USA’s SIB Act (explicitly outlines 13 social projects which are aligned with the US Federal Government’s agenda in tackling social illnesses). Indeed, the main difference between the eligible SRI sukuk projects and its conventional counterparts lies in its compliance to Shariah principles. It is also observed that a significant emphasis has been given on SRI legislations in ensuring proper reporting and disclosure provided to the SRI sukuk stakeholders together with critical evaluation on the impacts of SRI programmes provided by an independent assessor. Practical implicationsThis paper contributes towards enriching the literature on the Islamic capital market, particularly on the integration between sukuk and social impacts investing. This paper was intended to highlight the important requirements in issuing SRI sukuk to various stakeholders of the Islamic capital market. Originality/valueThe authors hope to shed some lights on the unique features and structural applications of SRI sukuk and its importance in becoming an effective instrument to raise funds for social agenda of a country by providing a real and practical example.
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Tripathi, Vanita, and Amanpreet Kaur. "Socially responsible investing: performance evaluation of BRICS nations." Journal of Advances in Management Research 17, no. 4 (June 12, 2020): 525–47. http://dx.doi.org/10.1108/jamr-02-2020-0020.
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PurposeThe study aims to contribute towards the sustainable development of financial systems, by testing the performance of socially responsible investing alternatives in emerging BRICS countries. The study outcomes give us an insight into viability of responsible financial decisions in contrast with the conventional style of investing.Design/methodology/approachThe authors examine the performance of socially responsible indices of BRICS nations vis-à-vis respective conventional market indices using various risk-adjusted measures and conditional volatility measures. We further segregate the 12-year study period to crisis and non-crisis period particular to the respective country, as well as a common global financial crisis period to analyze the impact of market conditions in BRICS nations and observe the performance using dummy regression analysis. Conditional volatility of the stochastic index series is measured using ARCH-GARCH analysis. Fama Decomposition Model helps rank the index performance through the sub-periods.FindingsFama Decomposition Model helps us observe that while Brazil secures a position in top rankers consistently, it is India that ranks top during crisis period. With evidence of outperformance in terms of risk-return by SRI indices of BRICS countries through the overall period as well as through different market conditions, our study contributes to the positive literature on socially responsible investing.Research limitations/implicationsThe study explores performance of SRI in BRICS and finds evidence of the sustainable investment to be non-penalizing to the investor, even as the performance trend remain distinct in the countries with same level of development. It has implications for the investors and asset managers to include responsible stocks, while for the companies and regulatory bodies to unite for better reporting and disclosures. Given the broad implications, future research is required to link the impact of various cultural, legislative and demographic factors on the level and performance of the socially responsible investment in BRICS nations.Practical implicationsThe current study evaluating and comparing performances of the socially responsible investments in BRICS nations puts forth following implications for the different sectors of the society, especially in emerging countries: (1) BRICS organization – The association of five economic giants, having significant influence over global as well as regional affairs, can aim to orient the countries' efforts towards collective sustainable development by designing uniform SRI framework. (2) Investors – In the globalization era, the investor can gain from ethical cross border investments to diversification and country benefits. (3) Companies and regulatory bodies – Only voluntary or mandatory unified efforts, to provide accurate and consistent disclosures, can upscale the mediocre growth trends of sustainable investing in emerging economies. (4) Asset Managers – Call of greater role in educating, warding off inhibitions related to RI.Originality/valueThis is to certify that the research paper submitted by us is an outcome of our independent and original work. We have duly acknowledged all the sources from which the ideas and extracts have been taken. The project is free from any plagiarism and has not been submitted elsewhere for publication.
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Asvathitanont, Chayakrit, and Nopphon Tangjitprom. "The Performance of Environmental, Social, and Governance Investment in Thailand." International Journal of Financial Research 11, no. 6 (December 14, 2020): 253. http://dx.doi.org/10.5430/ijfr.v11n6p253.
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The environmental, social, and governance (ESG) investment has evolved from the concept of socially responsible investing (SRI) starting in the period concerned with the civil rights movement and social responsibility. The concept of socially responsible investing has evolved into sustainable investment focusing on the companies that show concerns about environmental, social, and governance (ESG). This study aims to investigate the performance of ESG investment in the Stock Exchange of Thailand based on the list of companies with good performances in environmental, social and governance known as “ESG100 Companies” in Thailand. The performance of ESG investment is not different from the corresponding benchmarks. However, the risk of ESG portfolio is lower both in term of total risk and systematic risk, which results in the abnormal performance measured by Jensen’s Alpha. Finally, the list of ESG100 companies does not provide only static information in portfolio selection, but it can also provide information like the persistence in the list or the new inclusion to the list that can help in constructing the investment portfolio and generate abnormal performance.