The Ethical Mutual Fund Performance Debate: New Evidence from Canada

Bauer, Rob; Derwall, Jeroen; Otten, Rogér

doi:10.1007/s10551-006-9099-0

Cited by 339 publications

(220 citation statements)

References 31 publications

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“…Studies argue that in Canada, because of the dependency on fossil fuel, divestment would not be possible without being exposed to higher risk (Ritchie & Dowlatabadi, 2015). Other studies on SRI in Canada, however, proposed a positive correlation between CSP and financial performance for Canadian firms (Makni, Francoeur, & Bellavance, 2009), but did not suggest significant differences in the financial performance of responsible investment funds and conventional funds (Bauer, Derwall, & Otten, 2007). Weber (2016), however, found that Canadian funds that are less exposed to climate risks outperform their competitors with higher climate risk exposure and Rubin suggests that fossil fuel divestment will increases financial returns in Canada (Rubin, 2016).…”

Section: Methods and Samplementioning

confidence: 98%

Fossil Fuel Divestment Strategies: Financial and Carbon-Related Consequences

Hunt

Weber

2018

Organization & Environment

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Fossil fuel divestment is discussed controversially with regard to its financial consequences and its effect on decarbonizing the economy. Theory and empirical studies suggest arguments for both, financial underperformance and outperformance of divestment. Therefore, our first research objective is to understand the financial effect of divestment. The second objective is to analyze the influence of divestment strategies on the carbon intensity of portfolios.Empirically, our analysis is based on the Canadian stock index TSX 260 for the time between 2011 and 2015. The results of the study suggest higher risk-adjusted returns and lower carbon intensity of the divestment strategies compared to the benchmark. We conclude that divestment is not only an ethical investment approach, but that it is able to address financial risks caused by climate change and, at the same time, is able to reduce the carbon exposure of investment portfolios.

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Section: Methods and Samplementioning

confidence: 98%

Fossil Fuel Divestment Strategies: Financial and Carbon-Related Consequences

Hunt

Weber

2018

Organization & Environment

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“…They extend their study to the Australian market using the same methods. They investigate the performance of 25 ethical mutual funds compared to the Worldscope Australian Index, showing equal performance for the period between 1996 and 2003, after a catch-up period between 1992 and 1996 (Bauer et al 2006); a further analysis performed on the Canadian market comes up with the same results (Bauer et al 2007). Kreander et al (2005) study 60 European funds 30 ethical, and 30 non-ethical over the period 1995-2001 using a matched pair analysis, and find no signs of significant outperformance of the ethical funds over the non-ethical funds.…”

Section: Performance Of Sr Investmentsmentioning

confidence: 94%

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

Wallis¹,

Klein

2014

Bus Res

129

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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

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“…However, some studies find that social responsible investing might have better performance than 1 See, for instance, White (1995), Statman(2000), Derwall et al (2005), Benson et al (2006), Gil-Bazo et al (2010) or Derwall and Koedijk (2009). 2 See, respectively, Gregory et al (1997), Bauer et al (2007) and Fernandez and Matallin (2008). conventional funds with similar characteristics (see Kempf and Osthoff (2007) and Galema et al (2008) on US stock portfolios, or Fernandez and Matallin (2008) and GilBazo et al (2010) on Spanish and US mutual funds).…”

Section: Introductionmentioning

confidence: 99%