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.  

Livelihood Strategies and Household Income of A Paddy Farming Community in Northwest Selangor, Malaysia

2014 ◽  
Vol 2 (1) ◽  
pp. 1
Author(s):  
Siti Badariah Saiful Nathan ◽  
Mohd Rosli Mohamad
Keyword(s):  
Household Income ◽  
Investment Decision ◽  
Clear Understanding ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Developed Economies ◽  
Farming Community ◽  
Screening Strategies ◽  
Investment Process ◽  
Islamic Investment

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 Divest, Disregard, or Double Down? Philanthropic Endowment Investments in Objectionable Firms

2019 ◽  
Vol 1 (2) ◽  
pp. 241-256 ◽  
Author(s):  
Brigitte Roth Tran
Keyword(s):  
Investment Decision ◽  
Investment Decisions ◽  
Socially Responsible Investing ◽  
Firm Risk ◽  
Socially Responsible ◽  
Responsible Investing ◽  
Trade Offs ◽  
Profit Maximizing

How much, if at all, should an endowment invest in a firm whose activities run counter to the charitable missions the endowment funds? I offer the first model characterizing this type of investment decision. I introduce a strategy called “mission hedging,” where—in contrast to traditional socially responsible investing—foundations may benefit from skewing investment toward the objectionable firm in order to align funding availability with need. I characterize the trade-offs driving foundation investment decisions. By leveraging the idiosyncratic firm risk typically diversified away in profit-maximizing portfolios, foundations may find that bad actors provide good opportunities to hedge mission-specific risks. (JEL G11, G14, L31, M14)

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 Investing Well by Investing for Good?: Exploring the Motivations of Socially Responsible Investors

2013 ◽  
Vol 14 (1) ◽  
pp. 29-56
Author(s):  
Hannah Jun
Keyword(s):  
Theoretical Framework ◽  
Socially Responsible Investing ◽  
Global Level ◽  
Socially Responsible ◽  
Academic Literature ◽  
Responsible Investing ◽  
The World ◽  
Investment Process

Investments in socially responsible investing (SRI), an investment process that integrates environmental, social, and governance considerations into investment decisionmaking, have grown rapidly in many areas around the world. But compared to the growth of SRI investments on a global level, there is little clarity in the academic literature about why investors would choose to implement such a strategy. This paper attempts to highlight key theories and approaches to understand the motivetions of socially responsible investors and, in doing so, provide a more robust theoretical framework that underpins the recent global phenomenon.

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.

Ethical Finance: Trends and Emerging Issues for Research

Think India ◽  
2013 ◽  
Vol 16 (2) ◽  
pp. 01-18
Author(s):  
Hemlata Chelawat ◽  
I. V. Trivedi
Keyword(s):  
Investment Decision ◽  
Research Work ◽  
Future Research ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Responsible Investing ◽  
Investment Decision Making ◽  
Ethical Finance ◽  
Emerging Issues ◽  
Ethical Funds

The objective of this paper is to understand the manner in which research in ethical finance has evolved and development of literature in the field of ethical/ socially responsible investing has taken place, which would provide us directions for future research work in the area. Contributions of 108 research studies published in the area of ethical finance, over a time span of 15 years were analyzed using a framework that classified research in the area of ethical finance according to research agenda and data analysis framework. This points to the areas which lack in – depth research and are worthy of being explored in future research. The literature review reveals that research in ethical finance or socially responsible investment has been concentrated in a few areas. While some important areas like financial performance of ethical funds and indices have received adequate attention by researchers, there are several other areas which need focused research. Measurement of ESG performance, ESG criteria for selection of stocks for an ESG/ ethical investment portfolio, process of integration of ESG criteria into investment decision making and regulatory mechanisms that need to be evolved to promote adoption of ethical finance are some of the areas worthy of being explored in future research. The study also suggests that models using multi–decision criteria for portfolio selection could greatly improve the performance of an ethical portfolio.

scholarly journals Bibliometric analysis of research on responsible investment

2021 ◽  
pp. 70-76
Author(s):  
І.О. Makarenko ◽  
A.S. Vorontsova ◽  
Yu.V. Yelnikovа ◽  
A.S. Lasukova
Keyword(s):  
Bibliometric Analysis ◽  
Socially Responsible ◽  
Scientific Publications ◽  
Responsible Investment ◽  
Responsible Investing ◽  
Time Period ◽  
Functional Aspects ◽  
Socially Responsible Investments ◽  
Investment Process ◽  
Corporate Social

The formation of the concept of responsible investment involves a change in the basic understanding of the investment process, which requires consideration of the possible consequences of such actions for the planet, society and economy. In this regard, it is important to provide a thorough methodological basis that will be the groundwork for the dissemination of this concept and its scientific foundation. The purpose of this work is to conduct a quantitative bibliometric analysis of research on responsible investing. The scientometric international databases Web of Science from Clarivate Analytics and Scopus from Elsevier and their built-in tools were used for this purpose. The time period of the study was 1990 – March 2021, the main search query – «responsible investment». Quantitative analysis of scientific publications in selected databases was conducted by time, geographical and subject search, analysis of organizations that fund research on this topic and the most cited works. The results show a growing trend of research on responsible investment in the world, with an increase in recent years, and a predominance of research by scientists from English-speaking countries (UK, United States, Australia, Canada) and European countries (Spain, France, Germany, etc.). Research is mainly funded by the European Commission and other Japanese and European organizations. The analysis of subject areas in the study of responsible investing revealed the presence of both managerial and economic, as well as social and environmental issues. The analysis of the most cited works in the scientometric databases Scopus and WoS revealed the popularity of socially responsible investments in the context of institutional, behavioral and functional aspects, as well as their connection with corporate social responsibility.

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.

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