Does Socially Responsible Investing Pay in Developing Countries? A Comparative Study Across Select Developed and Developing Markets

2021 ◽  
pp. 231971452098028
Author(s):  
Vanita Tripathi ◽  
Amanpreet Kaur
Keyword(s):  
Developing Countries ◽  
Performance Evaluation ◽  
Social Impact ◽  
Developed Countries ◽  
Socially Responsible Investing ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Responsible Investing ◽  
Index Evaluation ◽  
Developing And Developed Countries

Socially responsible investing (SRI) is the catalyst in aligning financial growth with sustainable development. The current study is an attempt to investigate the viability of responsible investment across major developing and developed countries of the world. The authors evaluate and compare the performance of socially responsible indices, against their general and conventional counterparts, in select developing and developed countries through market conditions of bull and bear over a 12-year window. Descriptive statistics and risk-adjusted-performance evaluation methods of performance evaluation reveal socially responsible investing to be non-penalizing in developing countries. Premium rewards earned by SRI help the responsibility indices in emerging countries secure topmost ranks, using Fama’s decomposition model. While no significance in difference of performance is found among the indices in overall period, the study finds that the SRI strategy in emerging economies can provide investors with a safe investment vehicle during adversity. Thus, SRI can provide diversification benefit to the international investor seeking country effect, social impact as well as financial reward through responsible investing. The study on SRI index evaluation implies useful insights for achieving global sustainability goals through the use of financial tools to every market participant, especially in the era of globalization.

Understanding Socially Responsible Investing and Its Implications for Islamic Investment Industry

2019 ◽  
Vol 7 (1) ◽  
pp. 1
Author(s):  
Mohd Nizam Barom
Keyword(s):  
Investment Decision ◽  
Socially Responsible Investing ◽  
Clear Understanding ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Developed Economies ◽  
Responsible Investing ◽  
Screening Strategies ◽  
Investment Process ◽  
Islamic Investment

Understanding Socially Responsible Investing and Its Implications for Islamic Investment Industry // // // // // Social, ethical and environmental concerns have been used as important consideration for investment decision by an increasing number of investors. This can be seen by the size and growth of the socially responsible investment (SRI) industry in the developed economies. At the same time, scholars and commentators of Islamic finance have also called for Islamic investment industry to learn from the experience of SRI in incorporating social responsibility issues in the investment process, in line with the ethical principles of Islam and the overall objective of the Shari’ah (Maqasid al-Shari’ah). This would require Islamic investment sector to have a clear understanding of the SRI industry in order to effectively benefit from its experience. This is particularly critical due to the significant diversity of investors and complexity in the issues and strategies adopted in the SRI industry. Hence, this paper adds to the Islamic investment literature by providing an extensive  and systematic survey of SRI industry in terms of its (i) underlying motivations and values; (ii) issues of concerns; (iii) types of investors; and (iv) screening strategies. It then synthesizes these components within the context of the ‘value-based’ investors. This synthesized framework offers a useful tool for Islamic investment practitioners to understand the theoretical and practical aspects of SRI. Subsequently, the paper highlights important implications of the findings for Islamic investment industry in terms of the issues that it needs to consider in emulating SRI practices and a number of lessons that it can learn from the SRI experience.  

scholarly journals Islamic Bonds (Sukuk) in Malaysia

ICR Journal ◽  
2015 ◽  
Vol 6 (4) ◽  
pp. 489-508
Author(s):  
Inam Ullah Khan
Keyword(s):  
Middle East ◽  
Social Impact ◽  
Socially Responsible Investment ◽  
Secondary Market ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Responsible Investing ◽  
Social Impact Bonds ◽  
Sustainable And Responsible Investment

This article introduces the various types of sukuk that exist in the Malaysian secondary market. The Malaysian sukuk market was initially debt-based which attracted criticism from the Shariah scholars from the Gulf and Middle East. However, the Malaysian sukuk market made a turn towards equity and ijarah sukuk and ventured into “green sukuk” or socially responsible investment (SRI) sukuk. To facilitate the financing of sustainable and responsible investment initiatives, the Securities Commission of Malaysia (SC) has launched the Sustainable and Responsible Investment (SRI) sukuk Framework in 2014. The introduction of the SRI sukuk framework is seen to be in line with the rising trend of “green bonds” and “social impact bonds” that have been introduced globally to facilitate and promote sustainable and responsible investing. The writer has presented different examples from both regions to show that the gap has been bridged. However, despite this convergence the author recommends a revisit of the controversial debt-based instruments by Malaysian Shariah scholars.  

scholarly journals Can It Be Both Economically and Morally Rewarding to Invest in Developing Countries?

2005 ◽  
Vol 5 (2) ◽  
pp. 1850035 ◽  
Author(s):  
Ricardo Gottschalk
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Developing World ◽  
Developed Countries ◽  
Global Development ◽  
Socially Responsible ◽  
Responsible Investment ◽  
The World ◽  
Moral Case ◽  
Development Objectives

This paper argues that investing in developing countries can be both economically and morally very rewarding. It firstly shows that historically capital invested in developing countries has obtained higher returns than invested in developed countries. It secondly argues that there is also a moral case for investing in developing countries. It would accelerate economic development in the poorer areas of the world, thereby promoting global development. It finally suggests that the socially responsible investment (SRI)initiative could be broadened to incorporate development objectives more explicitly, thereby serving as a conduit to more investment to the developing world.

scholarly journals Performance Evaluation of SRI Funds: An Analysis of Fund Types

2019 ◽  
Vol 8 (1) ◽  
pp. 212 ◽  
Author(s):  
Halil Kiymaz
Keyword(s):  
Performance Evaluation ◽  
Mutual Funds ◽  
Control Sample ◽  
Socially Responsible Investing ◽  
Control Group ◽  
Fixed Income ◽  
Socially Responsible ◽  
Responsible Investing

Socially responsible investing (SRI) continues to get the attention of both practitioners and academicians as the demands for these funds increased sharply during the last decade. This study provides additional evidence on performances of SRI in mutual funds. The empirical findings show that although SRI funds experience lower average returns relative to the non-SRI control sample and various benchmarks, they provide higher returns relative to the control group and benchmarks using various risk adjusted measures. Among the subgroups analyzed, SRI Fixed Income funds offer the highest risk adjusted returns to investors while SRI Global funds provide the lowest returns. Finally, using Jensen’s alpha for individual funds, we find that about half of the funds experience negative alphas and 20 percent of SRI funds have statistically significant negative alphas compared to 7 percent of funds with that of positive alphas. Overall, the findings show mixed results concerning SRIs performance. 

Socially responsible investing: a review of the critical issues

2015 ◽  
Vol 41 (11) ◽  
pp. 1176-1201 ◽  
Author(s):  
Joan Junkus ◽  
Thomas D. Berry
Keyword(s):  
Mutual Funds ◽  
Firm Value ◽  
Socially Responsible Investing ◽  
Model Specification ◽  
Future Research ◽  
Socially Responsible ◽  
Content Type ◽  
Responsible Investment ◽  
Definitive Answer ◽  
Responsible Investing

Purpose – The purpose of this paper is to provide a review of the most recent work in major finance journals on socially responsible investment (SRI). While SRI involves individual investors, firms, and investment managers, the authors concentrate primarily on the investment view. Design/methodology/approach – The authors briefly review the development of socially responsible investing (SRI) and the theoretical issues related to SRI and investment choice. This is followed by a review of the empirical results concerning firm value. The question of whether SR mutual funds and SR indexes differ in performance or other characteristics from their conventional counterparts is discussed next, and lastly the authors present suggestions for future research directions. Findings – Despite the large and extensive amount of empirical research published on SRI in recent years, the authors find no definitive answer to the question of SR actions for either the firm or the investor. For firms, evidence linking corporate social responsibility (CSR) rankings with higher value is mixed, and depends on the type of CSR behavior studied as well as the measures of firm performance used. The performance of SR mutual funds and indexes generally are not significantly different from conventional funds or indexes, but again these results are also highly dependent on model specification, time period, benchmark, and other characteristics of the study. Practical implications – The value of SR investing has not been definitely proved. This means, however, that there is room for further on this important topic. Originality/value – This paper synthesizes and presents the most recent research on SRI from a wide variety of refereed sources.

scholarly journals TRENDS IN THE DEVELOPMENT OF SOCIALLY RESPONSIBLE INVESTING IN THE WORLD: THEORETICAL AND PRACTICAL ASPECTS

2020 ◽  
pp. 74-83
Author(s):  
Maryna Dielini
Keyword(s):  
Statistical Study ◽  
Socially Responsible Investing ◽  
Scientific Article ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Responsible Investing ◽  
Historical Factors ◽  
Socially Responsible Investments ◽  
The World ◽  
The Subject

The subject of this scientific article is the theoretical study of socially responsible investment (SRI) and development in the world and countries of Europe. The purpose of the research is to study the essence of socially responsible investing, its strategies and to analyze statistically the development of socially responsible investing in the world and in Europe in particular. Research methods. The methods of synthesis, analysis, comparison, generalization, statistical data processing, graphical and tabular methods of presentation of scientific results were used. The result of the work is a theoretical and statistical study of the subject of the article. The essence of socially responsible investing is defined as investing in socially responsible entrepreneurships with the purpose of profit. Historical factors of socially responsible investing have been investigated, among which the religious aspect and the increasing importance of human values have been highlighted. Have been described main strategies that investors use in decision-making process about financing companies or projects, outlined their differences and purposes. On the basis of abovementioned, a statistical study was conducted to analyze the overall status of the SRI in the world, what strategies are most represented and to explore more deeply the state of development of SRI in Europe, as the region with the highest volume of SRI. The results of the research can be used by companies that search an outside investor or, conversely, invest in other businesses to understand the request of today’s business society. Taking into account the world experience will allow to increase the company's own image and a positive effect on the society and the environment. Conclusion. Socially responsible investments are gaining ground in the world, as this is required by the global community. Entrepreneurs understand the importance of earning socially responsible profits, which is generated by investing in responsible enterprises and projects.

scholarly journals Recent Innovations in Socially Responsible Investing (SRI): The Role of “Socially Responsible Bonds” in Spurring Sustainable Development

2018 ◽  
Vol 19 (1) ◽  
pp. 27-47
Author(s):  
Hannah Jun ◽  
Hyojin Kim ◽  
Songhee Han
Keyword(s):  
Sustainable Development ◽  
Social Impact ◽  
Potential Role ◽  
Social Issues ◽  
Socially Responsible Investing ◽  
Investment Strategies ◽  
Socially Responsible ◽  
Responsible Investing ◽  
Social Impact Bonds

While it has become clear that the global community needs to utilize partnerships between the public and private sectors to achieve broader economic and development goals, there has been less discussion about the potential role of investors in shaping and participating in this movement. Part of this may be due to familiarity with traditional methods such as official development assistance (ODA) and relatively less understanding about recent innovations in socially responsible investing (SRI), including social impact bonds and development impact bonds. As economies like Korea have begun to show greater interest in harnessing various investment strategies to achieve broader social goals, we find it critical to better understand what financial tools are available within the context of encouraging sustainable development. As such, this paper highlights the potential role investors can play in contributing to broader social issues both at home and abroad through an examination of recent innovations in SRI – specifically, the category of so-called “socially responsible bonds.”

Socially Responsible Investing and Sustainable Indices: A Sustainability Agenda

2021 ◽  
pp. 097468622110457
Author(s):  
Firdaus Khan M. R.
Keyword(s):  
Information Needs ◽  
Stock Exchange ◽  
Moving Average ◽  
Clean Energy ◽  
Developed Countries ◽  
Socially Responsible Investing ◽  
Socially Responsible ◽  
Responsible Investing ◽  
Autoregressive Moving Average Model ◽  
Sustainability Indices

COVID-19 pandemic has brought climate change and socially responsible investing back to the forefront. Sustainable investing, though well-entrenched in developed countries, is slowly gaining traction in emerging markets. Sustainability indices operate as quality indicators and bridge information gap. This study explores the usefulness of three such indices and offers an autoregressive moving average model on Carbonex series for sustainable investments on Bombay Stock Exchange. However, the model fails to align with the long-term goals of socially responsible investing and the investor community needs to engage with regulators, corporations and rating agencies so that these sustainability indices can better serve their information needs and offer a valid measure of sustainable practices. COVID-19 brings with it the opportunity to ideate and envision innovative approaches to support a carbon-free economic agenda and to design eco-friendly infrastructure, planned urban development and transition to clean energy. Take–make–consume–waste attitude is out and the philosophy of preserve–endure–nurture–bequeath will be the new normal.

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