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When does CSR motivate investors? A simultion study
Abstract
Afin de vérifier si les motivations exprimées par les investisseurs individuels pour l’investissement socialement responsable (ISR) affectent leurs investissements, un jeu de simulation a été mis en place. Une méthodologie combinant analyse quantitative et qualitative, fait apparaitre un décalage entre le dire et le faire des investisseurs. Ce décalage est interprété par recours au concept de dissonances cognitives. Des solutions permettant de limiter les perturbations du mécanisme décisionnel sont alors envisagées.
... Another example is practitioners who invest in companies with strong ESG management that are likely to outperform their competitors in the long run. The ESG analysis can be the deciding factor between otherwise identical companies or countries (Heimann and Lobre-Lebraty, 2018). If all other factors are equal, the practitioner will choose the company or country that performs better on its ESG analysis. ...
Purpose
The purpose of this paper is to investigate the direct and indirect links between environmental, social and governance (ESG) practices and financial performance using the mediate role of green innovation.
Design/methodology/approach
To test the current study hypotheses, the authors applied linear regressions with a panel data using the Thomson Reuters ASSET4 and Bloomberg database from a sample of 115 UK and 90 Germany companies selected from the ESG index over the period 2005–2019.
Findings
The results show that the strengths ESG increase the firm value and the weaknesses decrease it. In addition, the authors find that green innovation fully mediates the relationship between ESG practices and financial performance in UK and Germany.
Practical implications
The findings provide interesting implications to academics practitioners and regulators who are interested in discovering ESG score, financial performance and green innovation. The results also provide insights to regulators and the board of directors on future growth opportunities for the company and the country.
Originality/value
This study is unique in examining the mediation effect of green innovation on the relationship between ESG practices and financial performance.
This paper analyzes the relevance of social accounting information for managing financial institutions, using Banca Transilvania Financial Group (BTFG) as a case study. It explores how social accounting data can enhance decision-making processes within these institutions. Social information from BTFG's annual integrated reports was used to construct a social balance sheet, and financial data was collected to calculate economic value added (EVA) and social value added (SVA). Research question include: Does social accounting represent a lever for substantiating the managerial decision in financial institutions? Results show that SVA is a valuable indicator for financial institution managers, reflecting the institution's contributions to social well-being, environmental impact, and community support. Policy implications suggest regulatory bodies should mandate the inclusion of social accounting metrics in financial reporting standards to encourage socially responsible practices, enhance transparency, and incentivize institutions achieving high SVA. This paper contributes to the literature by demonstrating the practical application of social accounting in financial institutions and highlighting the importance of SVA as a managerial tool. It aligns with existing research on integrating corporate social responsibility (CSR) metrics into financial decision-making, enhancing the understanding of combining social and economic indicators for comprehensive performance assessment The abstract covers motivation, methodology, results, policy implications, and contributions to the literature.
Dans un contexte socio-économique impacté par la pandémie de la COVID (2020) les entreprises recherchent des stratégies innovantes en matière de Responsabilité Sociale des Entreprises. Confrontées à ces nouvelles demandes et en l’absence de référentiels de réponses pertinentes, les Business Schools se trouvent dans une situation paradoxale déterminée par de nouveaux risques structurels, non seulement économiques mais également académiques. En effet, elles doivent trouver des solutions leur permettant de poursuivre leurs activités dans la formation des futurs managers, notamment avec une approche pédagogique holistique intégrant un « portefeuille de soft skills » indispensables pour répondre aux nouveaux besoins des entreprises .
Little empirical research has explored Canadian investors' interest in responsible investing. A variety of demographic and attitudinal characteristics can contribute to who makes ethical investments. Using a survey of 1,834 residents of Ontario, Canada three groups of investors are identified: those interested in responsible investments who actively avoid investing in some sectors, those interested in responsible investments who do not actively avoid any types of investments, and traditional investors that are not interested in responsible investing. Demographic and attitudinal variables that explain who falls into which group are explored.
Purpose
This paper aims to examine the differences in investors’ reactions toward firms’ corporate social responsibility (CSR)-related news announcements between individuals and institutions.
Design/methodology/approach
Analyzed by the short-term event study and ordinary least squares (OLS) methods using a unique CSR data set collected from newspapers in Japan from 2001 to 2016.
Findings
The study finds, first, the different reactions toward CSR-related news announcements among shareholders. Second, the findings indicate that individual investors are more sensitive to CSR-related positive news, whereas institutional investors are more concerned about the negative news, providing one of the reasons for mixed results in the studies on the CSR and financial performance linkage. Those findings indicate that CSR-related news affects investors’ behaviors differently based on their purpose, ability and accessible information.
Practical implications
This study deepens the understanding of the different investing behaviors toward CSR-related announcements by shareholder type. Second, different attitudes among investors require different investor relations (IR) approaches depending on the type. It also provides valuable implications not only for Japanese business managers or policymakers but also for those from countries with a similar stage of market maturity in the CSR context.
Originality/value
This paper is original in two ways. First, to the best of the author’s knowledge, this is the first paper to deepen the understanding of investors’ reactions toward CSR-related events through analysis by the main shareholder, which provides some insights into mixed results in the previous studies. Second, the original CSR data set collected from newspapers by the author allows the analysis to use a larger data set than other research, resulting in more robust conclusions.
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 meta-analysis 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.
La prolifération incessante des normes a conduit les fondateurs de l’ISEOR depuis 2002 d’entamer un vaste programme de recherches développées par un réseau international ouvert baptisé "Tétranormalisation" (Savall et Zardet, 2005). Si les entreprises subissent des pressions émanant des normes comptables et financières (IAS-IFRS), des normes du commerce mondial (OMC), des normes sociales (SA 8000), et des normes qualité-sécurité-environnement (ISO 9001, OHSAS 18001, ISO 14001) force est de constater que ces quatre pôles de normes les conduisent à répondre aux attentes et aspirations disproportionnées et incompatibles de leurs parties prenantes. Cet article propose de questionner l’impact de la Tétranormalisation sur les pratiques de RSE. Ainsi, avec ce développement continu des normes dans tous les secteurs d’activité et dans tous les compartiments de l’activité des entreprises, Frederick Winslow Taylor serait-il de retour avec l’Organisation Normalisée du Travail (ONT)? Comment intégrer en management des normes multiples et contradictoires? Les normes portent-elles préjudice à la RSE? Pour se pencher sur la problématique, la RSE semble être un fort cadre de réflexion sur ces différentes questions.
The paper examines stakeholder theory and what it means for CSR research and practices. First, some theoretical and conceptual weaknesses are pinpointed. Then I underline how stakeholder theory is rooted in contractarianism: the firm is viewed as a nexus of contracts between stakeholders, in the line of transactions costs theory, its philosophical foundations are inspired from social theories of social contract and justice as fairness, as they were especially developed by Rawls. I show the conceptual problems inherited from such contractarian views and finally examine the likely sociopolitical consequences of these views. Grounding CSR in stakeholder theory may well result in some extended free-market liberalism and in voluntarism regarding CSR matters and eventually in limited ethical version of an unbridled capitalism.
Si l’investissement socialement responsable (ISR) séduit de plus en plus d’investisseurs institutionnels, le développement du marché des particuliers reste timide. Peu d’études ont essayé de comprendre ce phénomène. Via une enquête menée auprès d’un panel de consommateurs représentatifs de la province de l’Ontario, cet article présente une lecture des comportements des investisseurs particuliers face à l’ISR. Les critères de décisions quant à la sélection de fonds d’ISR et les profils des particuliers en possédant sont exposés.
We look at the links between the Digit Ratio-the ratio of the length of the index finger to the length of the ring finger-for both right and left hands, and giving in a Dictator Game. Unlike previous studies with exclusively Caucasian subjects, we consider a large, ethnically diverse sample. Our main results are as follows. First, for Caucasian subjects we estimate a significant positive regression coefficient for the right hand digit ratio and a significant negative coefficient for its squared measure. These results replicate the findings of Brañas-Garza et al. (2013), who also observe an inverted U-shaped relationship for Caucasian subjects. Second, we are not able to find any significant association of the right hand digit ratio with giving in the Dictator Game for the other main ethnic groups in our sample, nor in the pooled sample. Third, we find no significant association between giving in the Dictator Game and the left hand digit ratio.
In four experiments we showed that investors are not only interested in maximizing returns but have non-financial goals, too. We considered what drives the decision to invest ethically and the impact this strategy has on people's evaluation of investment performance. In Study 1, participants who chose a moral portfolio (over an immoral one) reported being less interested in maximizing their gains and more interested in being true to their moral values. These participants also reported feeling lower disappointment upon learning that a different decision could have yield a better outcome. In Studies 2 and 3, we replicated these findings when investors decided not to invest in immoral assets, rather than when they choose to invest morally. In Study 4, we found similar results using the same industrial sector in both the moral and the immoral conditions and providing participants with information about the expected return of the portfolio they were presented with. These findings lend empirical support to the conclusion that investors have both utilitarian (financial) goals and expressive (non-financial) ones and show how non-financial motivations can influence the reaction to unsatisfactory investment performance.
The focus of this paper is employee ownership, specifically the role of employee ownership in value creation. Based on a sample of 163 French companies, we have measured the impact of employee share ownership on value creation for both shareholders and stakeholders. Only companies with a sustained employee ownership policy over a 5-year period (from 2001 to 2005), as defined by the French Federation of Employee and Former Employee Shareholders (FAS), have been considered. The results indicate that employee share ownership plans have no effect on shareholders’ or stakeholders’ value creation.
Most theorizing on the relationship between corporate social/environmental performance (CSP) and corporate financial performance (CFP) assumes that the current evidence is too fractured or too variable to draw any generalizable conclusions. With this integrative, quantitative study, we intend to show that the mainstream claim that we have little generalizable knowledge about CSP and CFP is built on shaky grounds. Providing a methodologically more rigorous review than previous efforts, we conduct a meta-analysis of 52 studies (which represent the population of prior quantitative inquiry) yielding a total sample size of 33,878 observations. The meta- analytic findings suggest that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is likely to pay off, although the operationalizations of CSP and CFP also moderate the positive association. For example, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based indicators, and CSP reputation indices are more highly correlated with CFP than are other indicators of CSP. This meta-analysis establishes a greater degree of certainty with respect to the CSP-CFP relationship than is currently assumed to exist by many business scholars.
La théorie de la dissonance cognitive : une théorie âgée d'un demi-siècle Pour la théorie de la dissonance cognitive, l'année 2007 est une date anniversaire. En eff et, voilà cinquante ans, Festinger publiait l'ouvrage princeps sur la théorie, devenue depuis une théorie majeure de la psychologie sociale. Selon la théorie de la dissonance cognitive, lorsque les circonstances amènent une personne à agir en désaccord avec ses croyances, cette personne éprouvera un état de tension inconfortable appelé dissonance, qui, par la suite, tendra à être réduit, par exemple par une modifi cation de ses croyances dans le sens de l'acte. Notre article se propose de présenter cette théorie dans ses grandes lignes.
Purpose
The purpose of this paper is to address reasons for consumer investment in socially responsible investment (SRI) profiled mutual funds. Specifically, the paper deals with the relative influence of financial return and social responsibility on the decision to invest in SRI profiled mutual funds.
Design/methodology/approach
A cluster analytic approach was used where 563 SR‐investors were classified into different segments based on their perception of importance of financial return and social responsibility. Furthermore, discriminant analysis and chi ² tests were used to profile the segments.
Findings
Three segments of SR‐investors were formed. The “primarily concerned about profit” SR‐investors value financial return over social responsibility. The “primarily concerned about social responsibility” value social responsibility over financial return. The “socially responsible and return driven” SR‐investors value both return and social responsibility when deciding to invest in SRI. The segments displayed distinct differences with regard to various profiling variables.
Research limitations/implications
As respondents were generated from one SRI provider, it is possible that the respondents are not fully representative of all SR‐investors.
Practical implications
Since there are segments of SR‐investors that invest in SRI because of different reasons, there is an opportunity for SRI providers to target and adapt communication to certain segments.
Originality/value
For both academia and the SRI industry this study provides useful knowledge on how private SR‐investors handle the issue of financial return and social responsibility when investing in SRI. This understanding of the differing motivations of the SR‐investor also holds practical importance for developing appropriate marketing strategies within the SRI industry.
This work examines the structure of information on stakeholders in the sustainability reports. The results show: 1) Differentiated practices within the companies, 2) Employees is the dominant group of stakeholders, 3) Issues are envisaged in the short-term, 4) The “economic” dimension is privileged while the dimensions “social” and “environmental” are secondary.
Debates continue to rage between those that argue that managers should maximize the present value of their firm's cash flows in making strategic choices and those that argue that, sometimes, the wealth maximizing interests of a firm's equity holders should be abandoned for the good of a firm's other stakeholders. This debate is addressed by proposing a theoretical model in which the supply of and demand for socially responsible investment opportunities determines whether these activities will improve, reduce, or have no impact on a firm's market value. The theory shows that managers in publicly traded firms might fund socially responsible activities that do not maximize the present value of its future cash flows yet still maximize the market value of their firm.
This paper explores the effect of exclusionary ethical investing on corporate behavior in a risk-averse, equilibrium setting. While arguments exist that ethical investing can influence a firm's cost of capital, and so affect investment, no equilibrium model has been presented to do so. We show that exclusionary ethical investing leads to polluting firms being held by fewer investors since green investors eschew polluting firms' stock. This lack of risk sharing among non-green investors leads to lower stock prices for polluting firms, thus raising their cost of capital. If the higher cost of capital more than overcomes a cost of reforming (i.e., a polluting firm cleaning up its activities), then polluting firms will become socially responsible because of exclusionary ethical investing. A key determinant of the incentive for polluting firms to reform is the fraction of funds controlled by green investors. In our model, empirically reasonable parameter estimates indicate, that more than 20 % green investors are required to induce any polluting firmss to reform. Existing empirical evidence indicates that at most 10% of funds are invested by green investors.
To understand why investors hold socially responsible mutual funds, we link administrative data to survey responses and behavior in incentivized experiments. We find that both social preferences and social signaling explain socially responsible investment (SRI) decisions. Financial motives play less of a role. Socially responsible investors in our sample expect to earn lower returns on SRI funds than on conventional funds and pay higher management fees. This suggests that investors are willing to forgo financial performance in order to invest in accordance with their social preferences. This article is protected by copyright. All rights reserved
Purpose
The research shows how overall performance can help foster trust in financial institutions. While a climate of mistrust amongst investors and the general public towards financial institutions is since recent turmoils on the financial markets, we believe that mutual funds adopting overall performance can help recover a climate of trust due to the implied balance between economic, social and environmental performance. More specifically, overall performance promotes values that are similar to investors’ values and could be used by responsible investment funds if they want to contribute to the restoration of trust in investment funds.
Design/methodology/approach
Using an innovative, experimental design, we test the effect of value similarity on the trust that investors have in the investment fund. This effect cannot be studied in isolation, which is why we compare it with the effects of financial performance and ethical labelling on trust.
Findings
We find that funds with similar values are perceived as more trustworthy by investors. Consequently, overall performance should be added to a fund managers toolbox if she wants to foster trust in her fund. The effect of financial performance on trust applies only when the investor has no other information regarding the fund. As for the ethical labelling of funds, it has no effect on trust.
Research limitations/implications
Our findings encourage research that aims to develop a comprehensive approach of integrated overall performance focusing on financial and extra financial values. Bonnet et al. (2016) field work on socio-economic management and Naro & Travaillé (2016) work on management controllers provide promising examples in this regard.
Practical implications
Investment funds can acquire an edge by communicating on overall performance and the specific values of their target investors. Merely labeling funds as ethical is not sufficient to increase trust.
Originality/value
Using an innovative experimental methodology we show that the underlying factor of overall performance on trust in investment funds is value similarity. We provide researchers and practitioners with insight about the underlying mechanisms of the effect of overall performance on trust.
Parmi les stratégies de recherche en gestion, l'étude de cas est une méthode tantôt assimilée à la recherche-action, tantôt classée parmi les éludes qualitatives exploratoires. Cette forme de recherche de fait mal connue et peu utilisée par les chercheurs en gestion n'a-t-elle pas pourtant un intérêt méthodologique et théorique important ? C'est ce que montre l'auteur qui, après avoir souligné la grande diversité des applications possibles de cette méthode, avance un certain nombre de prérequis pour son utilisation et en étudie les spécificités.
Strategic Management: A Stakeholder Approach was first published in 1984 as a part of the Pitman series in Business and Public Policy. Its publication proved to be a landmark moment in the development of stakeholder theory. Widely acknowledged as a world leader in business ethics and strategic management, R. Edward Freeman’s foundational work continues to inspire scholars and students concerned with a more practical view of how business and capitalism actually work. Business can be understood as a system of how we create value for stakeholders. This worldview connects business and capitalism with ethics once and for all. On the 25th anniversary of publication, Cambridge University Press are delighted to be able to offer a new print-on-demand edition of his work to a new generation of readers.
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titre>Résumé Cette étude a pour but de présenter une analyse statistique et méthodologique de la littérature empirique cherchant à démontrer une causalité entre l’investissement socialement responsable (ISR) et la performance financière ou boursière. A travers l’examen d’un corpus empirique regroupant 75 études, cette présentation détermine quels types de biais méthodologiques peuvent influencer la performance financière de l’ISR.
A partir d�une enquete en ligne, l�article etudie trois variables (caracteristiques du fonds, valeurs personnelles du conseiller, demande du client) influencant les recommandations des fonds d�investissement socialement responsable (ISR) par les conseillers clients bancaires. La propension a recommander est influencee par le type d�approche ESG, et la labellisation ISR. Les facteurs lies a la personnalite du conseiller et a la demande du client jouent aussi un role mais dans une moindre mesure. Les resultats soulignent l�utilite, pour favoriser la commercialisation des fonds ISR, de la mise en avant de certaines caracteristiques des fonds.
Interpreting the Logistic Regression ModelInference for Logistic RegressionLogistic Regression with Categorical PredictorsMultiple Logistic RegressionSummarizing Effects in Logistic RegressionProblems
This book describes the reasoned action approach, an integrative framework for the prediction and change of human social behavior. it provides an up-to-date review of relevant research, discusses critical issues related to the reasoned action framework, and provides methodological and conceptual tools for the prediction and explanation of social behavior and for designing behavior change interventions.
The assessment of additive value functions in Multicriteria Decision Aid (MCDA) has to face issues of legitimacy and technical difficulties when real decision makers are involved. This paper presents a synergy of three complementary techniques to assess additive models on the whole criteria space. The synergy includes a revised MACBETH technique, the standard MAUT trade-off analysis and UTA-based methods for the assessment of both the marginal value functions and the weighting factors. The paper uses a set of original robustness measures and rules associated with revised MACBETH and UTA in order to manage multiple linear programming solutions and to extract robust conclusions from them. Finally, to illustrate the methods’ synergy, an application example is presented, dealing with the planning of metro extension lines.
We examine religious attendance and portfolio selection decisions for an individual with religious beliefs within a continuous-time framework. Our findings are three-fold. First, religious contributions increase with wealth capital, the degree of religious devotion, and an increase in the wage level. Second, religious attendance positively relates to wealth capital and the performance of stock investments, but negatively correlates with wage return rates. Third, participation in religious activities can result in declining demand for risky asset investments. Theoretically, this study explains how individuals’ portfolio choices correlate with their religious activities.
This paper lays the mathematical foundations of the notion of an investment's sustainability return and investigates three different models of portfolio selection with probabilistic constraints for safety first investors caring about the financial and the sustainability consequences of their investments. The discussion of these chance-constrained programming problems for stochastic and deterministic sustainability returns includes theoretical results especially on the existence of a unique solution under certain conditions, an illustrating example, and a computational time analysis. Furthermore, we conclude that a simple convex combination of financial and sustainability returns - yielding a new univariate decision variable - is not sufficiently general.
Companies are increasingly asked to provide innovative solutions to deep-seated problems of human misery, even as economic theory instructs managers to focus on maximizing their shareholders' wealth. In this paper, we assess how organization theory and empirical research have thus far responded to this tension over corporate involvement in wider social life. Organizational scholarship has typically sought to reconcile corporate social initiatives with seemingly inhospitable economic logic. Depicting the hold that economics has had on how the relationship between the firm and society is conceived, we examine the consequences for organizational research and theory by appraising both the 30-year quest for an empirical relationship between a corporation's social initiatives and its financial performance, as well as the development of stakeholder theory. We propose an alternative approach, embracing the tension between economic and broader social objectives as a starting point for systematic organizational inquiry. Adopting a pragmatic stance, we introduce a series of research questions whose answers will reveal the descriptive and normative dimensions of organizational responses to misery.
Ethical or socially responsible investment (SRI) is one of the most rapidly growing areas of finance. New government regulations mean that all pension funds are obliged to take such considerations into account. However, this phenomenon has received little critical attention from business ethicists, and a clear conceptual framework is lacking. This paper, by a practitioner in the field, attempts to fill this analytical gap. It considers what difference, if any, lies between the terms ‘ethical’, ‘green’, or ‘socially responsible’. It also tackles the difficult question of how any public form of investment can be called ‘ethical’ in an overtly pluralistic society. The paper provides an account of the historical development of ethical investment, and traces the evolution of the varying terms used to describe it. This is followed by a conceptual analysis of these terms, and a description of ethical decision-making in this context. The paper ends by considering the role of shareholder action within ethical investment, and assesses the utility of the stakeholder model as a theoretical justification.
Although ethical investment is a growing phenonenon which attracts a signficant amount of media interest, relatively little has been written about the internal operations of ethical investment funds. Using a variety of sources, including interviews with a fund manager and participant observation at meetings of the fund’s ethical advisory committee, this paper examines the decision making of one ethical unit trust operating in the United Kingdom. In particular, it describes the development of the ethical criteria and the ways in which their implementation was monitored. Several significant parallels between publicly stated ethical investment criteria and corporate codes of ethics are then discusssed.
An important dimension of the ongoing trend toward greater corporate social responsibility is the emergence of individual and institutional investors who invest in companies that support social objectives. While a small number of studies have examined the criteria used by institutions, no studies have looked at individual investors. Using a mail survey of 4,000 investors in two mutual funds that incorporate social screens in their investment decisions, this study finds that compared with other investors, socially responsible investors are younger and better educated. Respondents most frequently identify environmental and labor relations issues when asked what defines socially responsible corporate behavior. Although the respondents value socially responsible behavior in companies they invest in, they are unwilling to sacrifice financial returns to achieve it.
The current study compares motives to invest in accordance with socially responsible criteria among different groups of investors. In total, 60 employees from 19 investment institutions, 453 private investors and 71 institutional investors participated in a questionnaire study. While socially responsible investment (SRI) among private and institutional investors was guided by self-transcendent values (environmental and social values), this was not the case among fund managers working in investment institutions. Fund managers in investment institutions were affected by beliefs about long‐term returns of SRI. Private investors were, in addition, influenced by beliefs about long‐term returns, whereas institutional investors were motivated by an effort to reduce financial risks. Finally, investment institutions tended to overrate the importance of financial returns among their beneficiaries (private and institutional beneficiaries) and underestimate the importance of ethical, environmental and social aspects for beneficiaries. The results indicate that private and institutional investors/beneficiaries give a wider interpretation of fiduciary duty than investment institutions do. Copyright (C) 2011 John Wiley & Sons, Ltd and ERP Environment.
Brian E. Roe and David R. Just focus on internal and external validity in economics research and balance between experiments, field experiments, natural experiments and field data. Validity within empirical economics is generally concerned with whether a particular conclusion or inference represents a good approximation to the true conclusion or inference. A study has ecological validity to the extent that the context in which subjects cast decisions is similar to the context of interest. If the researcher is conducting the study in the setting of direct interest and is able to conduct the study with minimal disturbance to the contextual ecology of that setting, then internally valid references will be meaningful for that setting. Economics has shifted from a field dominated by the use of uncontrolled field and market data to one in which many modes of research are used to test theory and inform policy.
Many writers have commented on the heterogeneity of the socially responsible investment (SRI) movement. However, few have
actually tried to understand and explain it, and even fewer have discussed whether the opposite – standardisation – is possible
and desirable. In this article, we take a broader perspective on the issue of the heterogeneity of SRI. We distinguish between
four levels on which heterogeneity can be found: the terminological, definitional, strategic and practical. Whilst there is
much talk about the definitional ambiguities of SRI, we suggest that there is actually some agreement on the definitional
level. There are at least three explanations which we suggest can account for the heterogeneity on the other levels: cultural
and ideological differences between different regions, differences in values, norms and ideology between various SRI stakeholders,
and the market setting of SRI. Discussing the implications of the three explanations for the SRI market, we suggest that there
is reason to be sceptical about the possibilities of standardisation if not standardisation is imposed top-down. Whether this
kind of standardisation is desirable or not, we argue, depends on what the motives for it would be. To the extent that standardisation
may facilitate the mainstreaming of SRI, it could be a good thing – but we entertain doubts about whether mainstreaming really
requires standardisation.
We investigate the role of personal values in an investment decision in a controlled experimental setting. Participants were
asked to choose an investment in a bond issued by a tobacco company or a bond issued by a non-tobacco company that offered
an equal or sometimes lower yield. We then surveyed the participants regarding their feelings toward tobacco use to determine
whether these values influenced their investment decision. Using factor analysis, we identified investment- and tobacco-related
dimensions on which participants’ responses tended to load. Two of these factors, relating to the societal impact of investment
decisions and the health effects of tobacco, were highly significant in determining whether participants selected a tobacco
or non-tobacco related investment. More importantly, we found that when the rate of return on a tobacco-related investment
exceeds the rate of return on an investment not involving tobacco by 1%, the intensity of participant concerns about the societal
effects of their investment decisions was especially important in determining investment choices. This finding indicates that
traditional wealth-maximization approaches, which do not consider the personal values of the investor, omit an important factor
that affects investment decisions.
Key wordsinvestment-personal values-socially responsible investing
An important goal of ethical investment is to influence companies to improve their ethical and environmental performance. The principal means that many ethical funds employ is passive market signalling, which may not, on its own, have a significant effect. A much more promising approach may be active engagement. This paper reports on a questionnaire study of a sample of 1146 ethical investors in order to assess whether U.K. ethical investors would support more activist ethical investment and whether they would be prepared to invest in companies which are failing ethically in order to do so. The results show general support for the current practice of passive signalling accompanied by "soft" engagement in the form of lobbying and the development of dialogue in order to improve corporate practice. The "harder" options of investing in companies that err in order to change them is, however, favoured by consistent minorities.
This paper reviews the development of socially responsible investment (SRI) over recent years and highlights the prospects
for an increasingly strong connection with the practice of corporate social responsibility. The paper argues that not only
has SRI grown significantly, it has also matured. In particular, it has become an investment philosophy adopted by a growing
proportion of large investment institutions. This shift in SRI from margin to mainstream and the position in which institutional
investors find themselves is leading to a new form of SRI shareholder pressure. Although this bears some resemblance to lobbying
campaigns which might take advantage of shareholder rights, we seek to distinguish it as an important phenomenon in its own
right — one to which corporate executives are likely to be paying increasing attention in the years to come. We further argue
that this approach potentially meets some of the earlier ethical criticisms of certain forms of SRI but, ironically, probably
owes its existence to those pioneering approaches. We conclude with some suggestions for further research to inform discussion
of the issues highlighted in the paper.
This study examines the impact of a social desirability response bias as a personality characteristic (self-deception and impression management) and as an item characteristic (perceived desirability of the behavior) on self-reported ethical conduct. Findings from a sample of college students revealed that self-reported ethical conduct is associated with both personality and item characteristics, with perceived desirability of behavior having the greatest influence on self-reported conduct. Implications for research in business ethics are drawn, and suggestions are offered for reducing the effects of a socially desirable response bias.
Socially responsible investing (SRI) has emerged in recent years as a dynamic and quickly growing segment of the U.S. financial services industry involving over
2 trillion in professionally managed assets. Its conceptual origins can be found in the early history of civilization, with it"s modern roots in the 1960s. This paper provides an overview of the breadth and depth of the concept and practice of socially and environmentally responsible investing, describes the investment strategies that together define SRI as currently practiced in the U.S., offers several observations about some of the factors fueling its dramatic growth, and presents data showing that investors who choose to invest in a socially and environmentally responsible manner can do so without giving up investment returns. SRI has matured to a point where virtually any investment need can be met through portfolio design that integrates an investor"s personal values, institutional mission, and/or social priorities. < div class=bstractPara < div class="The socially responsible investment industry in the UnitedStates is a young phenomenon. Even referring to it
When I hear businessmen speak eloquently about the “social responsibilities of business in a free-enterprise system”, I am
reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his
life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely”
with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its
responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords
of the contemporary crop of reformers. In fact they are — or would be if they or anyone else took them seriously -preaching
pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have
been undermining the basis of a free society these past decades.
The mixed methods paradigm is still in its adolescence, and, thus, is still relatively unknown and confusing to many researchers.
In general, mixed methods research represents research that involves collecting, analyzing, and interpreting quantitative
and qualitative data in a single study or in a series of studies that investigate the same underlying phenomenon. Over the
last several years, a plethora of research designs have been developed. However, the number of designs that currently prevail
leaves the doctoral student, the beginning researcher, and even the experienced researcher who is new to the field of mixed
methods research with the challenge of selecting optimal mixed methods designs. This paper presents a three-dimensional typology
of mixed methods designs that represents an attempt to rise to the challenge of creating an integrated typology of mixed methods
designs. An example for each design is included as well as a notation system that fits our eight-design framework.