Ethical requirement and financial interest: a literature review on socially responsible investing

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper provides an overview of the status quo in socially responsible investing (SRI) literature. We outline motives, history, and current best practice of SRI. We also provide a thorough analysis of a wide set of studies that cover two key topics in this field: the first research objective is to determine the relative performance of SRI vehicles in comparison to their conventional benchmarks. Our metaanalysis shows that most research studies find that socially responsible (SR) investments perform equal to conventional investments, but these findings are challenged by contradictory results from other studies. The second objective is to analyze SR behavior's effects on a company's financial results. We cover the period between 1986 and 2012. This paper provides future researchers with a well-documented and structured overview of the existing literature on SRI, thereby identifying gaps that might be closed by future research. Terms of use: Documents in EconStor may

Environmental, Social and Governance (ESG) and Investment Decision in Bangladesh

“…However, emotional inclination, ingrained thought patterns, and the psychological biases of different human beings-that is, the behavioral paradigm of financial decision-making-describes how investors perceive the world and make investment decision [39][40][41]. Investment decision was previously followed by an ordinary triangle covering risk, liquidity, and return, however, a growing number of investors nowadays use the phenomenal square, covering liquidity, risk, return and sustainability [42]. Henceforth, the investment decision process of investors is not unique to all investors, but rather is heterogeneous to various investors.…”

Which proportion of SR investments is enough? A survey-based approach

“…While ethical investing has ancient origins in Jewish, Christian, and Islamic traditions, the roots of the modern SRI development can be found in the political climate of the 1960s (Renneboog et al 2008). A comprehensive overview of the existing literature on SRI is provided by von Wallis and Klein (2014).…”

Sustainability and Ethics in the Process of Price Determination in Financial Markets: A Conceptual Analysis

“…Orlitzky et al [34] found a moderate positive correlation between CSR and financial performance. Among the most recent panoramic papers, Von Wallis and Klein [35] showed that the dominant conclusion of the empirical studies is that a significant difference between the performances of SRI and conventional funds cannot be proved, although other studies identify underperformance or outperformance. Their respective numbers were: 15 for indifference (p. 84), 6 for underperformance (p. 79), and 14 for outperformance (p. 81).…”

“…Most of these studies (p. 84) apply risk-adjusted performance measures, which shows that the impact on accounting results has received less attention. Von Wallis and Klein [35] (p. 83) signaled that a cause of positive results could be that "managers will only take those SR decisions that improve corporate value". Junkus and Berry [36] provided a deep analysis of the critical issues on SRI.…”