6. Is Performance the Key Issue in SRI Funds? Conclusion and Lessons Learned from Three Decades of Studies

This paper conducts a systematic literature review of primary studies that analyze the relative performance of SRI Equity investment funds vs their conventional counterparts. The existing literature is analyzed and categorized into two samples depending on the benchmark used. Based on our research of the period between 1992 to July 2021 we arrive at a total sample of 54 papers. We can conclude that the vast majority (67%) of the empirical studies show no difference or a not statistically significant difference in the relative financial performance of SRI funds. We analyze trends in the literature and suggested “best practices” (sample size, period of the analysis, and use of multifactor measures). For the studies that use conventional funds as a benchmark, we analyze the use of the matched pair and the number of matching criteria. For studies that use an index as a benchmark, we observe differences between studies that use conventional indices, SRI indices, or both. The results suggest that performance may not be the key issue. We conclude with a debate on critical issues: the need for clearer definitions, disclosures, and standards, the relevance of the screening process of SRI funds, and the specific characteristics of SRI funds.