The relative importance of ethics, environmental, social and governance criteria

Abstract

Responsible investing (RI) is a growing phenomenon in the international investment arena. This article investigates the level of knowledge of members of South African pension/provident funds with regard to RI and the importance with which they view various ethical, environmental, social and governance (ESG) criteria. Respondents (n = 281) indicated a relatively low level of understanding of the concept of RI. Significant differences were noted in the perceptions of respondents about the relative importance of ethical and ESG criteria based on their gender and level of education. The findings could assist asset owners in reformulating their investment mandates, which in turn, will enable fund managers to invest in a more responsible manner.

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

“…The demographic characteristics of the social investors are an important factor for understanding their attitudes and behavior [33]. In this study, age was a control variable, but not a significant one; this finding supports the previous literature [27,90]. In addition, the education level of investors had an insignificant effect on the investment decision, which contradicts the previous literature [26,27], which indicated that an educated investor would be more concerned about ethical, environmental, social, or governance issues.…”

“…In this study, age was a control variable, but not a significant one; this finding supports the previous literature [27,90]. In addition, the education level of investors had an insignificant effect on the investment decision, which contradicts the previous literature [26,27], which indicated that an educated investor would be more concerned about ethical, environmental, social, or governance issues. A possible explanation for these findings might be the presence of a comparatively well-educated investor pole in the stock markets of Bangladesh.…”

“…Despite the fact that non-financial criteria, such as ethical, religious, environmental, social, and governance, in investment decision has been the subject of research for a long time [25][26][27], surprisingly little advancement has been made regarding the effect of the attitudes of individual investors towards ESG issues in terms of their investment decision; this is an important aspect of sustainability. However, studying the individual investors' inclination towards ESG issues is pivotal due to the inter-connectivity of finance and sustainability, and the influential role of the capital market in reconciling social and environmental equity, the development of ecological systems, and the stability of the financial system.…”

Assessing the business case for environmental, social and corporate governance practices in South Africa

“…The concepts RI and CSR are closely linked. Whereas CSR focuses on wealth creation from the perspective of firms, RI considers wealth creation from the viewpoint of investors (Viviers, Krüger & Venter 2012).…”

“…The term socially responsible investment (SRI) is essentially underpinned by ethical requirements to shape the market, while the RI concept integrates both ESG and financial aspects into mainstream investment decision-making (Van Der Ahee & Schulschenk 2013). Since the launch of the United Nations Principles for Responsible Investment (UN PRI), more researchers and practitioners have been using the term 'responsible investing' rather than 'socially responsible investing' (Viviers et al 2012).…”