Are SRI funds conventional funds in disguise or do they live up to their name?

Christin Nitsche and Michael Schrö der

Chapter 19 in Research Handbook of Investing in the Triple Bottom Line, 2018, pp 414-446 from Edward Elgar Publishing

Abstract: In recent years, the socially responsible investing (SRI) industry has become an important segment of international capital markets by incorporating ESG (environmental, social and governance) factors into investment selection processes. This study analyses whether SRI mutual funds are conventional funds in disguise or invest in line with their ESG objectives. In contrast to other studies, the analysis exclusively focuses on the non-financial performance of SRI vis-Ã -vis conventional funds and applies ESG corporate ratings of three rating agencies (Oekom, Sustainalytics and ASSET4) for a European and a global fund universe. The SRI and non-SRI funds are analyzed with respect to differences in their Top fund holdings, the average ESG values and the distribution of ESG performance, as well as the significance of rating differences by utilizing cross-sectional regressions. At a first glance, the top holdings of both fund types seem to be very similar, but SRI funds have on average higher ESG rankings. The cross-sectional regressions show that the ESG rating differences between SRI funds and conventional funds are significantly positive, i.e. SRI funds exhibit significantly higher ESG ratings than conventional funds.

Keywords: Business and Management; Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Are SRI funds conventional funds in disguise or do they live up to their name? (2015)
Working Paper: Are SRI funds conventional funds in disguise or do they live up to their name? (2015)
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