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2023 | OriginalPaper | Chapter

3. The Performance of Socially Responsible Investing: A Review

Authors : Lisa Gianmoena, Luca Spataro

Published in: ESG Integration and SRI Strategies in the EU

Publisher: Springer Nature Switzerland

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Abstract

This chapter provides a comprehensive examination of the existing empirical literature on socially responsible investments (SRI) compared to traditional investments. More precisely, it focuses on analysing various studies that have explored the performance of SRI mutual funds and portfolios in comparison to non-SRI investments. The authors also discuss the different theories that support the possible outcomes of these studies. Our research indicates that SRI do not result in worse returns and seem to perform similarly to standard assets, but with less volatility, particularly during times of crisis. However, there are methodological issues in estimating the full financial and non-financial performance of SRI, leaving the question of whether SRI strategies outperform traditional investment strategies still unanswered. The authors suggest that future research should aim to assess the overall value of SRI, not just its financial returns, by developing new measures that consider both the economic and social value of SRI.

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previous chapter Theory of Socially Responsible Investment: A Review
next chapter SRI: An Insight on the Evolution of Its Definition and a Focus on the European ESG Regulation
Footnotes
1
We recall that fund managers mainly adopt three screening methods to identify SRI: negative screening (exclusion), positive screening (inclusion) and best in class (best performer in relation to the financial, social and environmental performance of each sector). Negative screening excludes companies involved in sectors that might be harmful to the environment or the society. Positive screening promotes companies with best ESG practices. Finally, the “best in class” screening selects those companies in a specific sector that demonstrate the best ESG credentials in their area of business. In some cases, companies identify a hybrid screening process considering all, or part of, the three methods mentioned above. (Capelle‐Blancard & Monjon, 2014; Erragraguy & Revelli, 2015; Leite & Cortez, 2015; Chap. 4).
 
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Metadata
Title
The Performance of Socially Responsible Investing: A Review
Authors
Lisa Gianmoena
Luca Spataro
Copyright Year
2023
Book
ESG Integration and SRI Strategies in the EU

Print ISBN: 978-3-031-36456-3

Electronic ISBN: 978-3-031-36457-0

Copyright Year: 2023

DOI
https://doi.org/10.1007/978-3-031-36457-0_3