...could also be framed as a valid statistical construct. Social responsibility had been positively associated with financial outcomes. Typical socially responsible investors tilt their portfolios toward stocks of companies with high scores on social responsibility characteristics and shun stocks of companies associated with tobacco, alcohol, gambling, firearms, and military or nuclear operations. Analyzing 1992-2007 returns of stocks rated on social responsibility, study found that this tilt gave such investors an advantage over conventional investors. The study also found that shunning resulted in a disadvantage for such investors relative to conventional investors. The advantage from tilting toward stocks of companies with high social responsibility scores is largely offset by the disadvantage from the exclusion of stocks of shunned companies. Socially responsible investors can thus do both well and good by adopting the best-in-class method in constructing their portfolios: tilting toward stocks of companies with high scores on social responsibility characteristics but refraining from shunning stocks of any company. Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to a act to benefit society at large. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Businesses can use ethical decision making to secure...
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... November 20, 2010 This is a critique of the research article, Beyond Dichotomy: The Curvilinear Relationship between Social Responsibility and Financial Performance, written by Michael L. Barnett and Robert M. Salomon. Michael Barnett is a professor at the College of Business Administration, University of South Florida and Robert Salomon is a professor at the Stern School Business, New York University. There has been much debate on whether or not there is a link between financial and social performance when it comes to investing. Most research is done by comparing socially responsible investing (SRI) funds to those of funds that do not screen their holdings based on social and or environmental criteria. Barnett and Salomon’s research also tackles this question however, instead of doing the same types of comparison, they chose to compare and measure mutual funds that all practice socially responsible investing (SRI), in order to discern which funds perform better and what makes them different from the other SRI funds. Barnett and Salomon developed four (4) hypotheses to test during their research: 1. The relationship between the intensity of social screening and financial performance for SRI funds is curvilinear (U-shaped). 2. SRI funds that select firms for their portfolios based on labor relations screening criteria will earn higher financial returns than those that do not. 3. SRI funds that select firms for their portfolios based on community...
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...|BUSINESS ETHICAL BEHAVIOR & CORPORATE SOCIAL RESPONSIBILITY | | | |Student’s Name:Renee Giordani | | | |Course Title:Sales Management | | | |Professor:Gene Dichiara | | | |SUNY EMPIRE STATE COLLEGE | | | |Date: December 09, 2014 | Business Ethical Behavior & Corporate Social Responsibility: Why Organizations Must Have IT Corporate Social Responsibility has gradually developed into one of the greatest ethical aspects that have to be adhered...
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...STOCKHOLM SCHOOL OF ECONOMICS Master thesis within Finance Evaluating the Performance of Socially Responsible Investment Funds: A Holding Data Analysis H. Camilla Stenström* Jessica J. Thorell** Abstract: This paper investigates the performance of regular mutual funds compared to Socially Responsible Investment (SRI) mutual funds, over the time period of January 2001 to September 2007. The paper extends the research on the performance of SRI funds by using holding data of regular funds to create replicating portfolios. In the replicating portfolios, unethical investments are excluded according to a norm-based screening list, hence creating artificial SRI funds. The replicating portfolio returns are then used as a benchmark to compare against the SRI funds’ and regular funds’ returns. Results from the study indicate that an exclusion of companies according to norm-based screening can improve a fund’s performance. However, when looking specifically at the fund management of SRI funds, the results point towards inferior performance compared to regular funds. Key Words: Socially Responsible Investment (SRI) funds, ethical investments, holding data analysis, norm-based screening PhD Stefan Engström 13:15-15:00, December 14, 2007 Room 349, Stockholm School of Economics Tutor: Presentation: Venue: * 19873@student.hhs.se ** 19924@student.hhs.se H.C. Stenström and J.J. Thorell ACKNOWLEDGEMENTS Special thanks to tutor PhD Stefan Engström for all support and guidance...
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... Objectives • To highlight the key themes in the research literature. • To evaluate the outcomes of ethical investment for special interest groups. • To discuss the various processes or mechanisms associated with ethical investment. • To assess the impact of ethical investment on the behavior of the organization. Processes Process of socially responsible investing includes the development of mechanisms which inform actual and potential investors about the involvement of organizations in activities which are seen either as of concern or are attractive in ethical terms. There are two major ways of establishing whether an investment is ethical. The first is to apply a negative screen (a "never if" case) whereby certain businesses are avoided, presumably because they are injurious to human health. The second way is to apply a positive screen (an "only if" case) to those firms that remain possible investment targets; in particular, those identified as engaging in socially responsible Conclusion The study has demonstrated the complexity of many of the issues raised by this topic including the motives of socially responsible investors, the different types of screening processes involved, the mixed evidence concerning...
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...industry. Objectives • To highlight the key themes in the research literature. • To evaluate the outcomes of ethical investment for special interest groups. • To discuss the various processes or mechanisms associated with ethical investment. • To assess the impact of ethical investment on the behavior of the organization. Processes Process of socially responsible investing includes the development of mechanisms which inform actual and potential investors about the involvement of organizations in activities which are seen either as of concern or are attractive in ethical terms. There are two major ways of establishing whether an investment is ethical. The first is to apply a negative screen (a "never if" case) whereby certain businesses are avoided, presumably because they are injurious to human health. The second way is to apply a positive screen (an "only if" case) to those firms that remain possible investment targets; in particular, those identified as engaging in socially responsible Conclusion The study has demonstrated the complexity of many of the issues raised by this topic including the motives of socially responsible investors, the different types of screening processes involved, the mixed evidence concerning the financial return of ethical funds, and the links between...
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...Bottom of Form Email Sent! You have successfully emailed the post. Green Banking For Small Businesses Tim Chen, NerdWallet | Sep. 6, 2011, 9:07 PM | 635 | In an increasingly eco-conscious market, many small businesses are finding creative ways to go green. Whether it’s improving their energy efficiency, buying organic products, composting or just turning off electronics at night, being green means all sorts of things to different people. One small thing you may not have considered is green banking. Most banks have at least one green initiative in place (or claim to), and a few have made the extra effort to distinguish themselves as green businesses. But what does “green banking” mean exactly? Depending on whom you ask, it’s a marketing term, a social philosophy, an investment strategy, and everything in between. However, if you’re an entrepreneur, you probably want to know if it makes sense on a business level. The answer is yes! You’ll save money, you’ll help the planet, and if you’re already running a green business, it’s a great next step. That said, if you’re serious about getting a greener banking experience, you’re going to have to look at facts, not fluff. What is your bank really doing to be more environmentally friendly? Have they cut back on their paper and energy use? Do they invest in sustainable or green businesses? Do they give back to the local community in any way, or give money to charity? You don’t need to do that much digging to get some...
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...companies. Barrett believes that organizational values are more important today than at any other time in history because the personal and societal context within which business operates is changing. Who you are as an organization, and what you stand for, is just as important as what you sell. The values that an organization lives by are important to a variety of stakeholders: Societal: Organizational values need to meet society’s expectations with regard to environmental stewardship and social responsibility. Failure to support society’s values can have a very significant impact on financial performance. Shareholders: Organizational values need to meet the needs of the new breed of shareholders that are only investing in companies that: (a) meet socially responsible investment criteria; and (b) compete to be the best companies to work for, or other quality awards. Potential employees: To attract the best people, the organizational values need to meet the needs of potential new employees who are choosing to work in organizational cultures...
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...and Pax World Balanced Fund are all sustainable and responsible mutual funds that invest in Fords Motor Company and Kellogg Company. These companies meet the funds goals by qualifying for their screening criteria. All three funds have very diverse portfolios. Calvert Social Index I fund is a very respectful SRI fund and is described on socialfunds.com as “The Calvert Social Index Fund seeks to match the performance of the Calvert Social Index, which measures the investment return of large- and mid-cap stocks of companies that meet Calvert's social investment criteria.” Gabelli SRI Green Fund is described on socialfunds.com as “Fund will seek to achieve its objective by investing substantially all, and in any case, no less than 80% of its assets in common stocks and preferred stocks of companies that meet the Fund's guidelines for social responsibility at the time of investment.” Pax World Balanced Fund is described on socialfunds.com as “The Fund follows a Sustainable Investing approach and expects to invest approximately 60% of its assets in equity securities and 40% in debt securities.” All three funds have a core emphasis of generating returns by investing in sustainable and socially responsible companies. Ford Motor Company and Kellogg Company are both very noticeable companies grounded on their efforts of improving societies and being responsible. All three mutual funds pursue companies who are environmentally responsible and have a positive record. Fords Motor Company is...
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...invest in a socially responsible company 4 Factors considered by the SRI funds/investors for investing into any company 4 Sources to gather the information for the decision making process 4 Different strategy used by the funds to make SRI decisions 5 6. Two examples of SRI funds: Composition and unique features 6 A. Triodos Sustainable Equity Fund 6 B. Calvert Capital Accumulation Fund Class C 6 7. A Company with SRI investment: Starbucks 7 About the company 7 Sustainability initiatives 7 Controversies 8 ESG Ratings 9 8. Conclusion 9 9. Appendices 10 10. References 10 1. What is SRI? Socially Responsible Investing (SRI) is sometimes referred to as “sustainable”, “socially conscious”, “mission,” “green” or “ethical” investing. In general, socially responsible investors are looking to promote concepts and ideals that they feel strongly about. The idea is that if oneinvests in companies that cause social or environmental harm, then one is profiting from their evil. SRI is an approach under which socially and environmentally conscious investors channel their funds towards those companies which have a positive impact on the community and environment, and avoid doing harm due to their operations. This approachcompels companies seeking a share of these investments to modify their practices to be eligible for such investments. Investors may be investment funds, or individual investors. Individual investors seeking to invest in a socially responsible...
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...Journal of Banking & Finance 29 (2005) 1751–1767 www.elsevier.com/locate/jbf International evidence on ethical mutual fund performance and investment style Rob Bauer b a,c , Kees Koedijk b,* ´ , Roger Otten c a ABP Investments, Schiphol, The Netherlands Faculteit Bedrijfskunde, Erasmus University Rotterdam and CEPR, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands c Maastricht University, Maastricht, The Netherlands Received 23 September 2003; accepted 28 June 2004 Available online 23 September 2004 Abstract Using an international database containing 103 German, UK and US ethical mutual funds we review and extend previous research on ethical mutual fund performance. By applying a Carhart multi-factor model [Carhart, Journal of Finance 57 (1997) 57] we overcome the benchmark problem most prior ethical studies suffered from. After controlling for investment style, we find no evidence of significant differences in risk-adjusted returns between ethical and conventional funds for the 1990–2001 period. Our results also suggest that ethical mutual funds underwent a catching up phase, before delivering financial returns similar to those of conventional mutual funds. Finally, our performance estimates are robust to the inclusion of ethical indexes, which, surprisingly, are not incrementally capable of explaining ethical mutual fund return variation. Ó 2004 Elsevier B.V. All rights reserved. JEL classification: G12; G20; G23 Keywords: Mutual...
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...Contemporary Issues in Marketing Green Marketing Enduser Green marketing Introduction The profit of a company depends on the consumption from their customers. In the traditional marketing, firms often focus on their products rather than the insights to their consumers. In the last few decades the way how consumers make their purchasing decisions has changed a lot due to some of issues, such as health, lifestyle, science, technology and environment. People nowadays gradually realize the environment deterioration and trying to do something to help it. Therefore, as consumers are the roles of protecting the environment in the marketing area, marketers should make more efforts to create a connection between marketing and environmental- friendly awareness. In order to achieve the aim that purchasing can satisfy customers in environmental issues, some companies use green marketing strategies in terms of recycle materials, saving energy and preventing pollution. In this essay, three articles will be discussed and the insight to green marketing and environmental issues will be determined. The relationship between customers and green marketing According to Jeff Kohan (2013), green marketing starts with creating a maintainable connection with the right consumers. The right consumers can be seen as those people who have eco-friendly awareness. Consumer buying behaviours can be affected by the feature of marketing strategy. The most significant characteristic is the self-concept...
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...Impact Investing and the Power Sector in Ghana By Godfred Amewu Despite the positive economic news and encouraging trends that have emerged from Ghana over the past decade, the troubling reality remains that the everyday livelihoods of Ghanaians have not kept pace with macroeconomic growth, and per capita GDP persistently lag behind the rest of the world. There is diverse school of thought deeply explaining why the livelihoods of Ghanaians are not keeping pace with the impressing economics figures quoted over the years. We submit that Impact Investing can address the stubborn income gap because it is vibrant and robust enough to promote sustained economic growth and generate long-term, viable livelihoods across the country. The very phrase “impact investing” sounds rapacious, but it is an emerging hybrid of philanthropy and private equity that proponents say is about to become more widespread. The Global Impact Investing Network (GIIN) defines Impact investments as investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. They can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances. From the above definition, it could be seen that impact investment has two main effects. Thus, the social effect and the economic effect. The social effects improve the livelihoods of society and...
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...Social Responsibility The benefits and suggestions to adopt CSR The essay will discuss the topic of social responsibility. It will explain the how companies in controversial industry sectors maintain reasonable, socially responsible standards whilst making their strategic decision, and present what benefits they can gain from them. Throughout this essay, empirical research and examples from academic literature will be described to substantiate the discussion. This essay uses the definition of corporate social responsibility used by Enz (2010) conceptualizing CSR as‘ CSR is concerned with the integration of environmental, social, economic and ethical considerations into business strategies and practices’. It is generally believed that social responsibility plays more and more important role in organization. Firms with good social responsibility may attract better employees and raise current employee’s loyalty, commitment and motivation to the company. A sociallly responsible company can act ethically and be willing to improve society. There are four types of corporate social responsibility: the economic responsibility , the legal responsibility, the moral commitment and the discretionary responsibility. (Enz 2010) Economic responsibility means that the company has the duty to be profitable and productive and meet the consumer demands of society. Legal responsibility, such as the achievement of economic goals within the limitation of written law. Moral commitment observed by unwritten...
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...Abstract Purpose – The purpose of this paper is to extend our understanding of corporate governance, social issues and capital markets by distinguishing between the socially responsible investing phenomenon and mainstream investing with respect to social issues. It attempts to clarify the domain by casting it in the theoretical frame of prospect theory and mental modeling. With a qualitative study done among large institutional investors in the Canadian securities industry, the article derives a proposed mental model of these institutional investors’ cognitive model of social issues as they impact investments. Findings – The institutional investors in this study know exactly where value is derived from social investments suggesting that there may be more alignment between directors, investors and societal expectations than has been previously suggested. Research limitations/implications – The limited number of organizations in the study reduces the generalizability of the findings. Practical implications – Managers and directors must have an understanding of how shareholder value and responsibilities intersect. In our research, we have found that these executives positioned their firms as leaders on the social responsibility front. Interestingly, their major shareholders also understood how responsibility and shareholder value intersected and as a result, financial performance was not sacrificed. Originality/value – The findings fromthis research shed light on...
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