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.

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.  

Private ethical fund investors across countries and time: a survey-based review

2015 ◽  
Vol 7 (4) ◽  
pp. 379-411 ◽  
Author(s):  
Anett Wins ◽  
Bernhard Zwergel
Keyword(s):  
Keyword Search ◽  
Relevant Literature ◽  
Future Research ◽  
Socially Responsible ◽  
Screening Criteria ◽  
Content Type ◽  
Responsible Investment ◽  
Private Investors ◽  
Ethical Funds ◽  
Fund Portfolio

Purpose – This paper aims to provide an overview of the literature to point out similarities and differences among private ethical investors across countries and time. Over the past three decades, many surveys have been conducted to advance the understanding of the demographic characteristics, motivation and morals of private ethical investors across countries and time. To date, the survey-based evidence on private investors into ethical funds is geographically rather segmented, and the research questions are fairly diverse. This permits only very temporally or regionally selective conclusions. Thereby, the authors identify interesting topics for future research. Design/methodology/approach – To identify the relevant literature for our review, the authors carried out a structured Boolean keyword search using major library services and databases. Findings – When questions about negative screening criteria are presented in a direct investment context, the consensus of private ethical investors “worldwide” (on average) is that social screening issues are most important, followed by ecological and moral topics. The percentage of ethical funds in the fund portfolio of the average private ethical investor in Europe seems to increase when the investor exhibits high degrees of pro-social attitudes and perceived consumer effectiveness. European private ethical investors are of the opinion that ethical funds perform worse but are less risky than conventional funds. Practical implications – The authors make suggestions on how investment companies should design their funds so that they can attract more socially responsible investors. Originality/value – The paper is of particular value because it focuses on private investors in the fast growing retail market of socially responsible investment funds.

scholarly journals Socially responsible investment: A view from the social rating agencies of Vigeo-Eiris and MSCI ESG STATS

2018 ◽  
Vol 4 (1) ◽  
pp. 27-40 ◽  
Author(s):  
J. A. González Bueno ◽  
J. Núñez Rodríguez
Keyword(s):  
Decision Making ◽  
Investment Decision ◽  
Socially Responsible Investment ◽  
Decision Making Process ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Rating Agencies ◽  
Investment Decision Making ◽  
The Social ◽  
Social Rating

The concern of investors for environmental, social and corporate governance issues is giving rise to certain changes in the investment decision-making process. Given this situation, socially responsible investment has received the attention of practitioners and academics, and has reached a significant level of development in financial community in recent years. The main goal of this paper is to examine social rating methodologies developed by the two most renowned agencies worldwide: MSCI ESG STATS and Vigeo-Eiris.

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 A Brief Review of Responsible AI and Socially Responsible Investment in Financial and Stock Trading

2021 ◽  
Author(s):  
A. K. M. Amanat Ullah ◽  
Samiha Sultana ◽  
Fahim Faisal ◽  
Md. Muzahidul Islam Rahi ◽  
Md. Ashraful Alam ◽  
...  
Keyword(s):  
Ethical Decision Making ◽  
Research Work ◽  
Machine Learning Techniques ◽  
Future Research ◽  
Socially Responsible ◽  
Research Directions ◽  
Responsible Investment ◽  
Learning Techniques ◽  
Socially Responsible Investments ◽  
Future Research Directions

Automated trading is used in most of the major markets of our world. In order to ensure sustainable development, incorporating ethical and socially responsible ideas while designing these Artificial Intelligence (AI) systems has become a necessity. Both the industry and the academia are working towards Responsible AI, which can make Socially Responsible Investments (SRI). This paper reviews the research on SRI investment in the financial sector and evaluates these methods, which can help find future research directions in Computational Finance. This survey looks at the machine learning techniques used for ethical decision-making while stock or forex trading, which will benefit any further research work on Responsible AI in Finance.<br>

A Study on How Investors Decide on Socially Responsible Investments: Classification of Investment Behavior According to Companies’ Environmental Activities

2014 ◽  
Vol 8 (5) ◽  
pp. 677-687
Author(s):  
Nariaki Nishino ◽  
◽  
Kaoru Kihara ◽  
Kenju Akai ◽  
Tomonori Honda ◽  
...  
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Investment Decision ◽  
Sustainable Production ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Investment Decision Making ◽  
Socially Responsible Investments ◽  
People’S Attitudes

Environmental problems must be solved urgently, and sustainable production activities are desired. This study focuses on environmental finance, which is a method of promoting sustainable corporation activities. Environmental finance allows socially responsible investment to directly contribute to corporate activities and sustainable production activities. To clarify the mechanism of eco-friendly investment decision making, 4,843 respondents took a questionnaire survey on investment decision making, based on the framework of prospect theory. The results showed that prospect theory did not always work for environment issues and that people’s attitudes when they decide on eco-friendly investments could be classified to four clusters.

Ranking Socially Responsible Mutual Funds

2012 ◽  
Vol 1 (2) ◽  
pp. 59-84 ◽  
Author(s):  
Blanca Pérez-Gladish ◽  
Paz Méndez ◽  
Bouchra M’Zali
Keyword(s):  
Decision Making ◽  
Mutual Funds ◽  
Investment Decision ◽  
Multicriteria Decision Making ◽  
Individual Investors ◽  
Socially Responsible ◽  
Ethical Investing ◽  
Responsible Investing ◽  
Investment Decision Making ◽  
Socially Responsible Mutual Funds

Socially Responsible Investing (SRI), also known as sustainable or ethical investing, corresponds to an investment practice that takes into account not only the usual return-risk criteria, but also other non-financial dimensions, namely in terms of environmental, social and governance concerns. Recently, given the causes of the 2008 financial crisis, these concerns became even more relevant. However, while a diverse set of models have been developed to support investment decision-making based on financial criteria, models including also socially responsible criteria are rather scarce. The main objective of this paper is to contribute to try fulfilling this gap on the financial literature, suggesting a Multicriteria Decision Making tool which allows individual investors to analyze and rank socially responsible mutual funds based on their environmental, social and governance performance and taking into account the individual, subjective, personal preferences of each investor.

scholarly journals A Brief Review of Responsible AI and Socially Responsible Investment in Financial and Stock Trading

2021 ◽  
Author(s):  
A. K. M. Amanat Ullah ◽  
Samiha Sultana ◽  
Fahim Faisal ◽  
Md. Muzahidul Islam Rahi ◽  
Md. Ashraful Alam ◽  
...  
Keyword(s):  
Ethical Decision Making ◽  
Research Work ◽  
Machine Learning Techniques ◽  
Future Research ◽  
Socially Responsible ◽  
Research Directions ◽  
Responsible Investment ◽  
Learning Techniques ◽  
Socially Responsible Investments ◽  
Future Research Directions

Automated trading is used in most of the major markets of our world. In order to ensure sustainable development, incorporating ethical and socially responsible ideas while designing these Artificial Intelligence (AI) systems has become a necessity. Both the industry and the academia are working towards Responsible AI, which can make Socially Responsible Investments (SRI). This paper reviews the research on SRI investment in the financial sector and evaluates these methods, which can help find future research directions in Computational Finance. This survey looks at the machine learning techniques used for ethical decision-making while stock or forex trading, which will benefit any further research work on Responsible AI in Finance.<br>

Environmentally friendly and socially responsible investment in and by occupational pension funds in the USA and in the EU

2021 ◽  
pp. 138826272110269
Author(s):  
Lauren Daniels ◽  
Yves Stevens ◽  
David Pratt
Keyword(s):  
Financial Performance ◽  
Investment Decision ◽  
Pension Funds ◽  
Socially Responsible Investment ◽  
Occupational Pension ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Occupational Pensions ◽  
The Usa ◽  
The Eu

Worldwide pension funds, in their capacity as large institutional investors, are under increasing pressure to take social and environmental considerations into account in their investment decision-making process. The concepts Socially Responsible Investment (SRI) and Environmental Social Governance (ESG) are indeed ubiquitous in the current investment and pension community. This article aims to provide some insight into the conceptual relationship between SRI and ESG and its legal implications for the investment behaviour of private pension funds in the USA and the EU. Hence, the first part of the article gives some background to the distinct concepts of SRI and ESG. This leads to the finding that SRI goes one step further than ESG by prioritising moral or ethical considerations that may not be material to an investment’s financial performance, whereas ESG functions as a guideline to enhance financial performance. The second part analyses the legal possibilities and constraints for responsible investment in American occupational pensions and the third part does the same for European occupational pensions. The article concludes with a summary and comparative overview of the American and European lessons.

scholarly journals STRUCTURAL-FUNCTIONAL APPROACH TO IDENTIFICATION OF RESPONSIBLE INVESTMENT

2021 ◽  
Vol 2021 (1) ◽  
Author(s):  
A. Vorontsova ◽  
A. Rudychenko ◽  
L. Zakharkina
Keyword(s):  
Social Issues ◽  
Functional Approach ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Responsible Investing ◽  
Main Requirement ◽  
Initial Stage ◽  
Analysis And Synthesis ◽  
Integrated Concept ◽  
Social Environmental

Numerous environmental problems, the consequences of the financial crisis, the aggravation of social issues (such as poverty, unemployment, other consequences of the COVID-19 pandemic etc) cause the need for the evolution of financial instruments in the field of investment. The main requirement is a reasonable investment, which involves focusing not only on financial benefits but also to promote social, environmental and economic (or sustainable) development. This work is devoted to the use of structural and functional approach to the identification of responsible investment. This allows us to consider such an investment concept as a complex system formed of interconnected functional elements. To do this, the author conducted a study of the essence of responsible investing and its main criteria. These primarily include consideration of various environmental, social and managerial factors (ESG-factors) in making management decisions. The next step is to analyze the approaches of domestic and foreign scientists to determine the main forms of responsible investment. Based on this, the stage formation of the concept of responsible investing is formed in the work. At the initial stage, there is the use of various forms of responsible investing, depending on the purpose of investors and the period time: ethical, green, thematic, impact investing. In the second stage, the idea of socially responsible investment was developed, and later - sustainable investment. The final stage is the allocation of responsible investment as a separate integrated concept that meets modern requirements. To better understand the distinction between certain forms of responsible investment in the work, their gradation depending on the orientation on financial or social goals has been studied. The study is theoretical and involved the use of general scientific methods: structural and functional approach, analysis and synthesis, grouping and logical generalization. The provisions formed in the article allow forming a theoretical basis within the research, which will be used for further work in this direction.

Sign in / Sign up

Export Citation Format

Share Document