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Socially Responsible Investing: An Investor Perspective

Author

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  • Thomas Berry

    ()

  • Joan Junkus

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Abstract

Given the growing importance of Socially Responsible Investing (SRI), it is surprising that there is no consensus of what the term SRI means to an investor. Further, most studies of this question rely solely on the views of investors who already invest in SRI funds. Our study surveys a unique pool of approximately 5,000 investors that contains both investors who have used SRI criteria in investment decisions and those who have not, and involves a broad array of criteria associated with SR investing. Our findings offer new insight into the SRI debate. For both sets of investors, environmental and sustainability issues dominate as the major category associated with SR investing. We find strong agreement in the ranking of the relative importance of various SRI factors despite differences between these two groups in their opinion of their overall importance. We also find that investors prefer to consider the SRI question in more holistic terms rather than using the exclusionary format favored by most SRI funds. Investors seem to prefer to reward firms who display overall positive social behavior rather than to exclude firms on the basis of certain products or practices. These findings can help providers of SR investment vehicles to improve the SRI products that they offer to the general investor, thus both encouraging the initial adoption of SR criteria by investors and increasing overall investment in SR choices. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Thomas Berry & Joan Junkus, 2013. "Socially Responsible Investing: An Investor Perspective," Journal of Business Ethics, Springer, vol. 112(4), pages 707-720, February.
  • Handle: RePEc:kap:jbuset:v:112:y:2013:i:4:p:707-720
    DOI: 10.1007/s10551-012-1567-0
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    References listed on IDEAS

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    1. Joan C. Junkus & Thomas C. Berry, 2010. "The demographic profile of socially responsible investors," Managerial Finance, Emerald Group Publishing, vol. 36(6), pages 474-481, May.
    2. Jonas Nilsson, 2008. "Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior," Journal of Business Ethics, Springer, vol. 83(2), pages 307-325, December.
    3. Beal, Diana & Goyen, Michelle, 1998. "'Putting Your Money Where Your Mouth Is' A Profile of Ethical Investors," Financial Services Review, Elsevier, vol. 7(2), pages 129-143.
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    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:6:p:1831-:d:150186 is not listed on IDEAS
    2. Anna Höchstädter & Barbara Scheck, 2015. "What’s in a Name: An Analysis of Impact Investing Understandings by Academics and Practitioners," Journal of Business Ethics, Springer, vol. 132(2), pages 449-475, December.
    3. repec:taf:oaefxx:v:5:y:2017:i:1:p:1323371 is not listed on IDEAS
    4. repec:gam:jsusta:v:10:y:2018:i:4:p:1204-:d:141339 is not listed on IDEAS
    5. repec:eee:quaeco:v:70:y:2018:i:c:p:214-226 is not listed on IDEAS
    6. Oscar De la Torre Torres & Mª Isabel Martínez Torre Enciso, 2017. "Is socially responsible investment useful in Mexico? A multi-factor and ex-ante review," Contaduría y Administración, Accounting and Management, vol. 62(1), pages 222-238, Enero-Mar.
    7. repec:kap:rqfnac:v:49:y:2017:i:3:d:10.1007_s11156-016-0605-x is not listed on IDEAS
    8. Lean, Hooi Hooi & Ang, Wei Rong & Smyth, Russell, 2015. "Performance and performance persistence of socially responsible investment funds in Europe and North America," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 254-266.
    9. repec:imx:journl:v:12:y:2017:i:3:p:67-87 is not listed on IDEAS
    10. Rossi, Mariacristina & Sansone, Dario & van Soest, Arthur & Torricelli, Costanza, 2019. "Household preferences for socially responsible investments," Journal of Banking & Finance, Elsevier, vol. 105(C), pages 107-120.
    11. repec:kap:jbuset:v:153:y:2018:i:2:d:10.1007_s10551-016-3356-7 is not listed on IDEAS
    12. Gregor Dorfleitner & Mai Nguyen, 2016. "Which proportion of SR investments is enough? A survey-based approach," Business Research, Springer;German Academic Association for Business Research, vol. 9(1), pages 1-25, April.
    13. Emiel Duuren & Auke Plantinga & Bert Scholtens, 2016. "ESG Integration and the Investment Management Process: Fundamental Investing Reinvented," Journal of Business Ethics, Springer, vol. 138(3), pages 525-533, October.
    14. Charfeddine, Lanouar & Najah, Ahlem & Teulon, Frédéric, 2016. "Socially responsible investing and Islamic funds: New perspectives for portfolio allocation," Research in International Business and Finance, Elsevier, vol. 36(C), pages 351-361.
    15. repec:spr:annopr:v:247:y:2016:i:2:d:10.1007_s10479-015-1947-9 is not listed on IDEAS
    16. Maria Cristina Rossi & Dario Sansone & Costanza Torricelli & Arthur van Soest, 2018. "Household Preferences for Socially Responsible Investments," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 18021, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    17. repec:kap:jbuset:v:157:y:2019:i:2:d:10.1007_s10551-018-3788-3 is not listed on IDEAS

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