What drives socially responsible investment? The case of the Netherlands
AbstractThis paper asks what determines the growth of socially responsible savings and investments in the Netherlands. We find that special tax regulation can be held responsible for more than half of the growth in socially responsible savings and investments during the period 1995-2001. It has resulted in socially and environmentally worthwhile projects that would otherwise not have had access to finance. Furthermore, it appears that investors in the Netherlands are sensitive to changes in the underlying regulation. However, an important fraction of the investors is likely to keep their investments if the favourable tax treatment were to be abandoned. This paper also investigates the financial performance of socially responsible savings and investments. We find that the investments earn returns that do not significantly differ from the return on their benchmarks. The risk, however, is significantly above that of the benchmark. In contrast, socially responsible savings earn a higher (after-tax) return and have equal risk in comparison with ordinary savings. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Sustainable Development.
Volume (Year): 13 (2005)
Issue (Month): 2 ()
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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719
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- Scholtens, Bert, 2001. "Borrowing green: economic and environmental effects of green fiscal policy in The Netherlands," Ecological Economics, Elsevier, vol. 39(3), pages 425-435, December.
- Chami, Ralph & Cosimano, Thomas F. & Fullenkamp, Connel, 2002. "Managing ethical risk: How investing in ethics adds value," Journal of Banking & Finance, Elsevier, vol. 26(9), pages 1697-1718, September.
- Tim Benijts, 2009. "Sustainable investment funds and the government: a comparative study on public policies in the Netherlands and Belgium," Environment, Development and Sustainability, Springer, vol. 11(6), pages 1155-1174, December.
- Riikka Sievänen & Hannu Rita & Bert Scholtens, 2013. "The Drivers of Responsible Investment: The Case of European Pension Funds," Journal of Business Ethics, Springer, vol. 117(1), pages 137-151, September.
- Bert Scholtens, 2006. "Finance as a Driver of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 68(1), pages 19-33, September.
- Benjamin Richardson, 2009. "Keeping Ethical Investment Ethical: Regulatory Issues for Investing for Sustainability," Journal of Business Ethics, Springer, vol. 87(4), pages 555-572, July.
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