The Impact of Ethical Ratings on Canadian Security Performance: Portfolio Management and Corporate Governance Implications

Klaus Fischer and Nabil Khoury

Cahiers de recherche from CIRPEE

Abstract: One approach that is gaining in popularity among portfolio managers uses ethical ratings, published by specialized research organizations, to screen securities for portfolio selection. Portfolio managers can thus gain a better understanding of the phenomenon and adopt a better and more consistent approach to ethical investment. By the same token, board of directors can measure the impact of their ethical policies on the market performance of the stock of their company. This paper provides new evidence about the impact of ethical ratings published in Canada on the risk-adjusted returns of the securities concerned, within the framework of a multi-factor Capital Asset Pricing Model, and gives an interpretation of the results from the perspective of portfolio composition and of corporate governance.

Keywords: Ethical; Ratings; and; Security; Performance (search for similar items in EconPapers)
JEL-codes: G11 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-acc, nep-bec and nep-fin
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Related works:
Journal Article: The impact of ethical ratings on Canadian security performance: Portfolio management and corporate governance implications (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0501

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