Development of SRI funds and markets

Simon Strong ()
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Simon Strong: Capco, Postal: Broadgate West, 9 Appold Street, London EC2A 2AP, UK,, http://www.capco.com

Journal of Financial Transformation, 2010, vol. 29, 123-129

Abstract: Socially responsible investment (SRI) has its origins in the ethical investment policies of churches and other religious institutions, but has broadened to include wider social and environmental issues. Today, the SRI market covers a wide variety of funds and investment styles, with a global value of around €5 trillion. Although there is no single definition of SRI, the market can be divided into a central “core” SRI sector and a more diffuse “broad” SRI sector. SRI funds and investors use a range of different analytical techniques to qualify or disqualify investments within their portfolios. SRI is promoted by a number of international, national, and industry initiatives which provide benchmarks for investors and for companies who wish to demonstrate their SRI credentials. There is an expanding infrastructure to support socially responsible investors; this infrastructure includes SRI indices and SRI research and ratings agencies. One factor that has restricted the growth of the SRI market is the perception that SRI funds will generally underperform non-SRI funds. However, this perception is challenged by a range of different studies which suggest that there is no significant underperformance. Future trends in the SRI marketplace include increased transparency and differentiation in SRI funds, and greater availability of SRI products investing in emerging markets.

Keywords: SRI; ethical investment (search for similar items in EconPapers)
JEL-codes: G15 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1429

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