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Integrating societal issues into the asset allocation and selection strategies of ethical funds: the case of socially responsible funds and Islamic funds

Author

Listed:
  • Ezzedine Ghlamallah

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)

  • Laurence Gialdini

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)

  • Sami Ben Larbi

    (CERGAM de Toulon - Centre d'Études et de Recherche en Gestion d'Aix-Marseille/Equipe de recherche de Toulon - CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon - IAE Toulon - Institut d'Administration des Entreprises (IAE) - Toulon - UTLN - Université de Toulon, UTLN - Université de Toulon)

Abstract

Purpose: The purpose of this study is to examine how ethical investment funds, particularly socially responsible investment funds (SRI) and sharī'ah-compliant investment funds (SCI), integrate societal issues into their asset allocation and selection strategies. Design/methodology/approach: This study is based on a multiple-theoretical framework and uses a qualitative methodology. Thirty semi-structured interviews were conducted with SRI, SCI and conventional asset management professionals to understand the asset allocation and selection processes. Findings: The results show convergences in the integration of societal issues between SRI and SCI funds but also significant divergences linked to the underlying principles. Three manager profiles are identified: committed, chameleon and cosmetic. The seven stages in the process of integrating the issues of the Anthropocene Era into the management practices of SCI and SRI are highlighted, as is the process of SCI–SRI hybridization currently at work in the industry. Research limitations/implications: The research was limited by sample size, and regulatory variations were not considered. Future studies should explore the impact of emerging technologies on ethical investing. Practical implications: Ethical funds need to align their strategies with societal issues to maintain their legitimacy and differentiate themselves in the market while avoiding "greenwashing" and "islamicwashing" practices. Social implications: This study highlights the importance of strengthening the integration of environmental, social and corporate governance criteria for SRI funds and sharī'ah compliance for SCI funds to meet stakeholder expectations and promote overall sustainable development. Originality/value: This study proposes a new theoretical approach that integrates financial, institutional and strategic concepts to analyze the integration of societal issues into ethical fund practices.

Suggested Citation

  • Ezzedine Ghlamallah & Laurence Gialdini & Sami Ben Larbi, 2025. "Integrating societal issues into the asset allocation and selection strategies of ethical funds: the case of socially responsible funds and Islamic funds," Post-Print hal-05232196, HAL.
    • Handle: RePEc:hal:journl:hal-05232196
    DOI: 10.1108/SAMPJ-08-2024-0854
    Note: View the original document on HAL open archive server: https://hal.science/hal-05232196v1
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    References listed on IDEAS

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