Search Results (43)

As digital connectivity transforms financial decision-making, this study offers one of the first empirical investigations into the relationship between social media use and socially responsible investing (SRI). Using data from the 2021 National Financial Capability Study, multinomial regression analysis was used to explore whether people who rely on social media for investment decisions were more likely to invest in ways that reflect their values. The results show that investors who use social media for investment information are more likely to value being socially responsible as an important reason for investing. Younger, less experienced, and more risk-tolerant investors were especially likely to follow SRI strategies, and certain platforms like Twitter were more associated with SRI interest than others. These findings suggest that social media is not just a platform for sharing information; it may also shape how people think about investing and the role their money can play in making a societal difference. As online platforms continue to influence financial behavior, understanding their impact on values-based investing becomes increasingly important. This research contributes novel insights to the emerging intersection of social media, behavioral finance, and values-driven investing. Full article

We study whether the substantial rise in passive ownership reshapes activist shareholders’ behavior in sponsoring shareholder proposals, which shareholders use to address issues they believe are crucial for the sustainable growth of a company. Our findings reveal a positive impact of passive investors on the initiation of governance, socially responsible investing (SRI), and an aggregate of both proposals. Interestingly, we show that managerial ability and board co-option potentially moderate their link. In the subsequent analysis, we note a constructive influence of passive investors on post-initiation outcomes, evidenced by an increase in withdrawal and voting percentage of proposals corresponding to heightened levels of passive ownership. These findings suggest that passive investors foster communication between activists and management and endorse the case even when it progresses to the voting stage. More importantly, the market values these proposals positively as reflected in higher observed buy-and-hold returns. Finally, our results are robust to instrumental variable analysis using Russell reconstitution as an exogenous shock. Taken together, our study offers broad implications that passive investors can indirectly engage in promoting sustainable practices by encouraging activist investors to sponsor governance and socially responsible proposals, a collaborative approach where shareholders contribute to sustainability efforts. Full article

The content of this article relates to the widely considered issue of ESG investing, which has both theoretical and practical dimensions. The objective of this article is to verify whether there is a correlation between the implementation of ESG strategies and financial data and indicators. The first part of the discussion highlights the essence of a socially responsible investment—a concept that postulates the consideration of social responsibility in the functioning of companies. At a further stage, an attempt is made to systematize the concepts of ESG investing, where three key aspects are highlighted, i.e., environmental, social, and corporate governance. The article also refers to the reporting non-financial data, which are indicated by SASB standards. An empirical study is conducted on the UNIMOT Group. In this respect, the adjustment of ESG strategy directions with disclosure topics defined within the oil and gas midstream sector is analyzed. Then, using the GRETL econometric package, the relationship between the selected financial data is verified for the periods analyzed, with particular emphasis on the year of implementation of the ESG strategy, i.e., 2021. The conclusions and directions for further research are presented in the final section of the article. Full article

Since the Chinese economy has transitioned to a sustainable model, the Chinese socially responsible investment (SRI) market has expanded rapidly, which has deeply stimulated the development of environmental, social, and governance (ESG) ratings for Chinese firms. Domestic agencies, such as SynTao, Rankins (RKS), Sino-Securities (SSII), and China Alliance of Social Value Investment (CASVI), and international agencies, such as Bloomberg, FTSE Russell (FTSE), and Morgan Stanley Capital International (MSCI), have launched their own ESG rating systems. These emerging ratings may provide users of information with more diverse references; however, if their results are too divergent, they may also confuse users. To what extent do these ESG rating results in the Chinese market converge or diverge? Aiming to answer this question, we used Hushen 300 index firms in 2019 as the initial sample, and selected 195 firms covered by the above seven ratings for the analysis. Firstly, by comparing the overlap in the top 100 lists of these sample firms, we found that the list overlap rate between each pair of ratings was between 66.36% and 82.35%; however, only 35% of the firms were listed in the top 100 of all seven ratings. Furthermore, the Pearson correlation analysis showed that the correlation coefficients between each pair of ratings ranged from 0.057 to 0.736, and the average was only 0.411. These results suggest a wide divergence in the ESG rating results for Chinese firms. We suggest that information users need to consider a more diverse and comprehensive perspective when utilizing these ratings. Full article

At the intersection of digitization and sustainability, the current article explores the application of environmental, social, and corporate governance (ESG) in the service sector in India. The analysis draws on findings collected through questionnaires and interviews (mixed methods) with managers at middle, senior, and top levels of the hierarchy. The findings suggest that technology can both facilitate and hinder the sustainability effort; therefore, the implications on internal stakeholders, such as workers and managers, can be both positive and negative. Additionally, technologies that are taken for granted in certain parts of the world may be inappropriate in the Indian context. As a result, sustainability frameworks are implemented selectively rather than holistically. The adoption of an ESG framework has a largely positive impact on investors. While companies do not place much emphasis on employees’ wellbeing and ‘human rights’, they still link ESG to ‘Supply Chain Sustainability’. Contributing to the signaling theory, there is also evidence of firms’ motivation to adopt ESG practices for the purposes of legitimacy and forming external stakeholders’ perceptions. The current study is both timely and important due to the high interest in the application of tools facilitating sustainability performance. The study contributes to both the literature and practice, since it adds to our understanding concerning the challenges faced by firms in implementing ESG practices, whereas it also enables administrators to identify areas for the further development of sustainable practices. Full article

This paper aims to examine the publication metrics of literature related to the influential aspects of ESG (environmental, social, and governance), SRI (socially responsible investing), ethical, and impact investing on the portfolio and financial performance literature. It also seeks to identify major patterns and core themes in this topic and draw lessons from the past literature for future directions. Data from the SCOPUS database were used in this study. The ‘biblioshiny’ R package, also known as ‘bibliometrix 3.0’, was employed to conduct bibliometric analysis, utilising mapping and clustering techniques on 260 articles, in order to distil the comprehensive knowledge and identify emerging trends in ESG, SRI, ethical, and impact investing. The thematic map classified the ESG, SRI, ethical, impact investing and performance relationship themes into four categories of themes: niche themes (SRI, engagement and ESG), motor themes (corporate financial performance, corporate social performance, ESG, ESG factors, sustainability, performance, integrated reporting, gender diversity, and board size), emerging or declining themes (social responsibility, environmental performance, socially responsible investment, ethical investment, and SRI), and basic or transversal themes (financial performance, corporate social performance, ESG performance, environmental, social, and governance). Socially responsible investing, engagement, and ESG imply a position between niche themes and a highly developed topic/emerging or a decreasing theme, while the impact of COVID-19 on sustainability and financial performance implies a position between a highly developed topic/emerging or decreasing theme and a basic theme. The findings contribute to the enhanced understanding of ESG, SRI, ethical, impact investing and performance, which are crucial for an efficient capital market in promoting sustainability and sustainable development. The study offers vital practical implications and future research directions. Full article

Socially responsible investing (SRI) aims to guide corporate behavior through investing and thus to make a better society since its debut. From a micro perspective, this study aims to empirically examine whether the propensity for SRI of mutual funds promotes the corporate social performance (CSP) of investee companies and to determine what are the mechanisms under this promotion effect and under what circumstances this promotion effect gets stronger. After our main analysis confirms the promotion effect in China, our mechanism analysis shows the following: mutual funds with a high propensity for SRI promote investee CSP, because they promote internal control and demand better disclosure of social responsibility information; the promotion effect of mutual funds as shareholders from within a company can substitute for the effects of a good external environment such as a highly marketized region or a competitive industry. Our heterogeneity analysis further shows that the promotion effect is stronger in state-owned enterprises, where corporate executives are more willing to accept suggestions related to social responsibility and in a good social trust atmosphere, which sheds light on shareholder activism in private and informal manners. Full article

Investors are increasingly concerned with the sustainability of firms and their impact on global development, resulting in a rise in Socially Responsible Investing (SRI) that considers environmental, social, and governance (ESG) factors. Integrating sustainability into company strategies can affect various aspects of an organization, including IPOs (initial public offerings). Given the growing importance of ESG information disclosure, this study wants to examine the potential effect of an ESG report disclosure on IPO performance, since there are not studies focused on analyzing how ESG factors and IPO performance are correlated. The purpose of this study is to examine how ESG disclosure affects IPO underpricing and increases transparency for stakeholders to reduce information asymmetry. This study explores the impact of disclosing ESG information on IPO underpricing using a sample of 100 European IPOs from 2017 to 2021, with 50 firms disclosing an ESG report prior to the IPO and 50 that did not. The results showed that the publication of a sustainable report before an IPO has a positive effect on underpricing by reducing it. This finding suggests that companies that publish sustainability reports are perceived to be less risky, and investors value ESG disclosure as a tool to reduce the risks associated with ESG issues. The work contributes to the research on firms’ incentives to disclose ESG information. Our study is limited by the size of the sample, which is limited and only focused on European companies; therefore, future studies should consider companies from other parts of the world, and with more data related to IPO performance. Full article

An increasing number of investors is including sustainability considerations in their investment processes. This can improve both financial and corporate sustainability performance. The emergence of sustainable investing as an academic research field has been accompanied by considerable interest from the industry. Despite its importance, there is still no uniform understanding of what a socially responsible investment (SRI) comprises. There is a multitude of similar terms that are not clearly defined and delineated, accompanied by a lack of a uniform understanding of how sustainability should be measured in the investment context. The resulting confusion hinders conceptual clarity, a material barrier for both scholarly and practitioner endeavours in the field. We try to address these issues by conducting a structured literature review based on database searches and cross-reference snowballing. We aim to provide a synthesised and unified definition of SRI and ancillary terms and to draw attention to the exact sustainability measurements. We (1) outline the history of the concept, (2) concisely define SRI and related terms, (3) propose a trinomial sustainability indicator framework (the Cambridge SRI indicator framework) for conceptualisation, and (4) use this framework to provide a structured overview of sustainability indicators for SRIs. Full article

Despite a large amount of assets under management and a strong influence on the sustainable investment movement, very little is known about what ethical investing looks like from a Christian perspective. We therefore analyzed the ethical investment policies of a unique dataset of Christian-influenced mutual fund providers using a structured–thematic content analysis. In detail, we looked at investment screens, investment techniques, and the public presentation of non-financial investment objectives. We note that, by and large, there is no “Christian investing” in the sense of an ethical investment policy that most fund providers have similarly implemented. The proposed explanation for the diversity is that the policies are determined by differing approaches to interpreting biblical texts and by divergent social and political influence factors. However, we have detected a unifying element among most Christians-influenced mutual fund providers: the intention to positively influence their portfolio companies’ sustainability indicators. Full article

Emerging markets offer some of the world’s most impactful investment possibilities for investors concerned with addressing global climate and socioeconomic issues. Sophisticated investors conjectured that socially responsible investment (SRI) or environmental social and governance (ESG) might give greater returns than investing in conventional stocks in an emerging market. At the same time, the investors favour conserving the environment while generating long-term economic growth. Being able to earn greater returns is an indication of an inefficient market. This paper investigates the random walk (weak-form of the efficient market) of SRI/ESG indices in the emerging market (based on IMF emerging market criteria). We use the daily data as a sample. Random walk is tested using an Augmented Dickey–Fuller (ADF) Unit Root test, Variance ratio test and Hurst exponent test. The findings report that all the indices are not following a random walk. Lack of ESG disclosure, inadequate corporate governance regulation and behavioural bias might be reasons for market inefficiency. Its implications for investors to reap abnormal market returns by identifying the undervalued stock in the emerging economies. The regulator’s approval of operational guidelines and the licensing of exchanges and clearing houses help maintain the markets’ fairness. Then, the regulator should intensify corporate governance enhancement, implementation and enforcement continuously; enhance the market and institutional infrastructure, and focus policy on encouraging a more significant and more diverse investor base. Full article

SRI, or socially responsible investment, is a relatively new concept used to describe an investment that considers social, ethical, and environmental concerns. The purpose of this study is to investigate if collectivism, concern for the environment, financial performance, and awareness of SRI influence an individual’s propensity to invest in socially responsible investments (SRI). Secondly, the study evaluates the influence of the TPB (Theory of Planned Behavior) model constructs, attitude, subjective norms, and perceived behavioral control on the SRI investment intention of individual investors. A structured questionnaire was used to collect data on 449 individual investors for this cross-sectional investigation. The data were then analyzed further with a two-step structural equation modeling technique performed in Smart PLS 3.2.9. The PLS-SEM analysis found that collectivism, environmental concerns, financial performance, and awareness of SRI all had significant positive effects on attitudes toward SRI, which, in turn, resulted in SRI investment intention. Further, subjective norms and perceived behavioral control had a significant impact on individuals’ intentions regarding SRI. Full article

The concept of investor impact of socially responsible investments is relatively new. Our article expands knowledge in this field by analyzing how investor impact is implemented in the ethical investment policies of 45 providers of publicly traded, socially responsible funds. Based on a typological content analysis, we first develop an impact-focused category system, which in the second step is used to distinguish three types of fund providers: ESG hermits, ESG ambassadors and ESG evangelists. Our results suggest that socially responsible fund providers with a stronger impact orientation, such as ESG evangelists, also employ strategies that are more likely to achieve investor impact. In contrast, fund providers with a weaker impact orientation, such as ESG hermits, focus more on purity aspects and therefore tend to utilize strategies that defend the purity claim but also show a weaker investor impact. Full article

This research investigates the impact of crisis due to the COVID-19 pandemic on the dividend policy of green index companies in Indonesia, namely the Sustainable and Responsible Investment (SRI) by Biodiversity (KEHATI) Foundation, or SRI-KEHATI indexed companies. The purposive sampling technique was used to collect data from companies listed from 2014 to 2020, using static and dynamic panel data models. From the several panel data models tested, the static panel data regression with random effects model (REM) and fixed effect model (FEM) uses the least square dummy variable-robust standard error (LSDV-RSE) technique are the best econometric models feasible. The system generalized method of moments (SYS-GMM) is used as a suitable econometric model with a robustness test used to determine static panel data regression. It is reported that SRI-KEHATI indexed companies tend to distribute dividends positively during this crisis, and is also statistically proven robust. This gives a positive signal to the capital market concerning the sluggish trading activity. The market reaction test, using two-approaches, showed that this business did not provide a positive reaction to the capital market, which turned out to be pessimistic. Furthermore, profitability and financial leverage have a robust effect, while dividends from the previous year affect dividend policy on the static panel data model, and firm size affect dividend policy on SYS-GMM. Predictors that proved influential with a direction not in line with the hypothesis were investment opportunities on REM and SYS-GMM, and firm age on SYS-GMM. The parameter estimation that passes the model specification test is feasible, whiles the biased and inconsistency of parameter estimation due to the alleged correlation between $u_{i,t}$ and $PY{D}_{i,t}$ failed to occur in static panel data regression. The endogeneity issue was resolved by dynamic panel data regression with the strongest corrective effect. This research can be used as a reference for investors to obtain optimal returns on green index companies in the country. An optimal dividend policy can increase the value of the SRI-KEHATI indexed companies; therefore, it can contribute optimally to sustainability and responsibility for social and environmental aspects. Full article

This paper investigates how investors respond to the COVID-19 pandemic, particularly regarding their intention to invest in sustainability-related investment (SRI) funds. We conduct two experiments online with participants who have experience with stock and fund investments. The first one includes 292 participants, which aims to explore investors’ attitudes and investment intention of different sustainability-related components, and the second one includes 432 participants, which aims to examine how the COVID-19 pandemic affects individuals’ attitudes and investment intention. Our results show that investors tend to invest in SRI funds when the threat of the COVID-19 pandemic is salient. Specifically, we find that although investors perceive environmental issues to be more important than economic and social issues, their investment intention of economic-focused SRI funds significantly increases in response to the COVID-19 pandemic threat. These findings suggest that fund managers can focus on particular types of investors when designing SRI funds, such as active investors with a preference for technical analysis and young female investors with a high level of income and education. Full article