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Open AccessArticle

The Inclusion of Socially Irresponsible Companies in Sustainable Stock Indices

1
Department of Economic Analysis, Universitat de València, ERI-CES, IVIE, 46022 Valencia, Spain
2
Business School, Universitat Politècnica de Valencia, 46022 València, Spain
3
Department of Business Studies, Universidad Iberoamericana, 01219 Ciudad de México, Mexico
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(7), 2047; https://doi.org/10.3390/su11072047
Received: 5 March 2019 / Revised: 2 April 2019 / Accepted: 3 April 2019 / Published: 6 April 2019
(This article belongs to the Special Issue Sustainable Financial Markets)
Social rating agencies implement complex filters to identify the companies with the best sustainable and social performance and help investors select the companies for their sustainable portfolios. This study analysed whether companies that are defined as ethical, sustainable and socially responsible by those agencies actually deserve this label. More specifically, the inclusion in the prestigious Dow Jones Sustainability Index (DJSI) World of companies that have been involved in controversies according to the Thomson Reuters Eikon database was studied. The results show that the inclusion of irresponsible companies in the DJSI Index is a fact. This outcome is in line with previous studies that criticise the methodologies applied by social rating agencies and those which outline the similarity of sustainable and conventional portfolios. The results may explain the contradictory conclusions regarding the performance of sustainable and conventional mutual funds in numerous studies. View Full-Text
Keywords: socially responsible investment; social rating agencies; sustainability index; corporate ethics; screening methodology socially responsible investment; social rating agencies; sustainability index; corporate ethics; screening methodology
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Arribas, I.; Espinós-Vañó, M.D.; García, F.; Morales-Bañuelos, P.B. The Inclusion of Socially Irresponsible Companies in Sustainable Stock Indices. Sustainability 2019, 11, 2047.

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