4.7 Review

An industry-guided review of responsible investing: Bridging the divide between academia and industry

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Article Business, Finance

'Looking for Something that Isn't There': A Case Study of an Early Attempt at ESG Integration in Investment Decision Making

Anna Young-Ferris et al.

Summary: This paper focuses on the challenges and potentials of ESG integration, using a case study of an equity investment team's use of ESG data in investment analysis and decision making. The case highlights the feasibility and adequacy difficulties of ESG issues, as well as the discontinuities between financial and ESG accounting.

EUROPEAN ACCOUNTING REVIEW (2023)

Article Business, Finance

ESG ETFs and the COVID-19 stock market crash of 2020: Did clean funds fare better?

Ivelina Pavlova et al.

Summary: This study examines the risk-adjusted returns of ESG ETFs before and during the COVID-19 market crash, finding that lower-rated sustainable ETFs tend to outperform higher-rated ESG ETFs in the pre-crash period. During the market crash, the alphas of the models are negative and insignificant. Overall, higher sustainability ratings do not protect ESG ETFs from losses during the downturn, but they do not perform worse than the market.

FINANCE RESEARCH LETTERS (2022)

Article Business, Finance

The Role of Corporate Culture in Bad Times: Evidence from the COVID-19 Pandemic

Kai Li et al.

Summary: The study found that companies with a strong corporate culture tend to perform better in responding to the impact of COVID-19, and are more likely to support their communities, embrace digital transformation, and develop new products.

JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS (2021)

Article Business, Finance

Ethical investing and capital structure

Paresh Kumar Narayan et al.

Summary: This study tests the relevance of trade-off, pecking order, and market timing theories of capital structure from the perspective of Islamic stocks. It finds that the leverage speed of adjustment for Islamic stocks is faster compared to traditional stocks, potentially due to the risk-sharing principle reducing market imperfections. The inclusion of variables from other theories does not change the speed of adjustment, highlighting the importance of the trade-off theory.

EMERGING MARKETS REVIEW (2021)

Article Business, Finance

Measuring and Managing ESG Risks in Sovereign Bond Portfolios and Implications for Sovereign Debt Investing

Lionel Martellini et al.

Summary: This article highlights the importance of implementation choices in incorporating ESG constraints in sovereign bond portfolio construction. Negative screening leads to more diversified portfolios with lower tracking error, while positive screening results in higher ESG scores but an increase in risk budgets. Focusing on risk reduction at the selection stage helps investors decrease opportunity costs in the most important dimension for them.

JOURNAL OF PORTFOLIO MANAGEMENT (2021)

Review Green & Sustainable Science & Technology

Mapping socially responsible investing: A bibliometric and citation network analysis

Markus Losse et al.

Summary: The research highlights the importance of socially responsible investment in improving the long-term sustainability of economic systems and investment portfolio performance and risk profiles. Through bibliometric analysis and visualization techniques, it provides insights into research trends in the field of socially responsible investment and suggests promising avenues for further research.

JOURNAL OF CLEANER PRODUCTION (2021)

Article Business, Finance

Responsible investing: The ESG-efficient frontier *

Lasse Heje Pedersen et al.

Summary: The theory proposes that ESG scores of stocks play two roles: providing information about firm fundamentals and affecting investor preferences. By computing the ESG-efficient frontier and empirical data, the costs and benefits of responsible investing are demonstrated.

JOURNAL OF FINANCIAL ECONOMICS (2021)

Article Business

Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack

Eduardo Duque-Grisales et al.

Summary: This study found a significantly negative relationship between ESG scores and financial performance, with negative relationships observed between environmental, social, and governance factors when studied separately. The moderating effects of financial slack and geographic international diversification on the relationship between ESG dimensions and firms' financial performance were also highlighted.

JOURNAL OF BUSINESS ETHICS (2021)

Article Hospitality, Leisure, Sport & Tourism

Socially responsible investment, ethical rating, and separating contracts: A theoretical exploration in hospitality industry

Debdatta Pal

Summary: This study theoretically examines the role of ethical rating agencies, showing that hotels with low ESG risk would prefer to signal their worthiness and that socially responsible investment would advise a hotel to obtain an ethical rating when the expected value of sample information turns positive. This analysis could guide future empirical investigation and policy frameworks on ethical screening.

INTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT (2021)

Article Business, Finance

Impact investing

Brad M. Barber et al.

Summary: Investors derive nonpecuniary utility from investing in dual-objective Venture Capital (VC) funds, sacrificing returns. Impact funds underperform traditional VC funds, but are highly preferred by certain investors (such as development organizations, foundations, etc).

JOURNAL OF FINANCIAL ECONOMICS (2021)

Article Business, Finance

ESG preferences, risk and return

Bradford Cornell

Summary: Investor preferences and risk are two primary factors affecting expected returns for companies with high ESG ratings. While investor preferences for highly rated ESG companies may lower the cost of capital, it could also lead to lower expected returns for investors. The relationship between ESG and risk remains uncertain, but if ESG is a risk factor, it suggests lower expected returns for investments in highly rated companies. Overall, while ESG investing may have social benefits, higher expected returns for investors are not guaranteed.

EUROPEAN FINANCIAL MANAGEMENT (2021)

Article Business, Finance

No more excuses! Performance of ESG-integrated portfolios in Australia

Darren D. Lee et al.

Summary: The study shows that integrating ESG analysis into investment practices in Australia does not harm risk-adjusted returns. Portfolios with high ESG ratings consistently outperform in terms of returns, diversification efficiencies, and overall risk, with no evidence of underperformance against the market.

ACCOUNTING AND FINANCE (2021)

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ESG Controversies and Their Impact on Performance

Carmine de Franco

JOURNAL OF INVESTING (2020)

Article Business, Finance

ESG Investing: From Sin Stocks to Smart Beta

Fabio Alessandrini et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2020)

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Reducing the Carbon Intensity of Low Volatility Portfolios

Jennifer Bender et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2020)

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An Integrated Approach to Quantitative ESG Investing

Mike Chen et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2020)

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Have Investors Paid a Performance Price? Examining the Behavior of ESG Equity Funds

Jan-Carl Plagge et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2020)

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ESG as Waving Banners and as Pulling Plows

Meir Statman

JOURNAL OF PORTFOLIO MANAGEMENT (2020)

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Sustainable factor investing: Where doing well meets doing good

John Hua Fan et al.

INTERNATIONAL REVIEW OF ECONOMICS & FINANCE (2020)

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Resiliency of Environmental and Social Stocks: An Analysis of the Exogenous COVID-19 Market Crash

Rui Albuquerque et al.

REVIEW OF CORPORATE FINANCE STUDIES (2020)

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Is there a relationship between Morningstar's ESG ratings and mutual fund performance?

Marie Steen et al.

JOURNAL OF SUSTAINABLE FINANCE & INVESTMENT (2020)

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Hedging Climate Change News

Robert F. Engle et al.

REVIEW OF FINANCIAL STUDIES (2020)

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ESG integration: value, growth and momentum

Lars Kaiser

JOURNAL OF ASSET MANAGEMENT (2020)

Article Green & Sustainable Science & Technology

Selecting Socially Responsible Portfolios: A Fuzzy Multicriteria Approach

Fernando Garcia et al.

SUSTAINABILITY (2019)

Article Green & Sustainable Science & Technology

Beyond Socially Responsible Investing: Effects of Mission-Driven Portfolio Selection

Tizian M. Fritz et al.

SUSTAINABILITY (2019)

Article Management

Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence

Rui Albuquerque et al.

MANAGEMENT SCIENCE (2019)

Article Business, Finance

Four Things No One Will Tell You About ESG Data

Sakis Kotsantonis et al.

JOURNAL OF APPLIED CORPORATE FINANCE (2019)

Article Business, Finance

Performance Assessment of Firms Following Sustainalytics ESG Principles

Aaron Filbeck et al.

JOURNAL OF INVESTING (2019)

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Is ESG an Equity Factor or Just an Investment Guide?

Andre Breedt et al.

JOURNAL OF INVESTING (2019)

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The Alpha, Beta, and Sigma of ESG: Better Beta, Additional Alpha?

Brian Jacobsen et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2019)

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Integrating ESG in Portfolio Construction

Roy Henriksson et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2019)

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A Guide to ESG Portfolio Construction

Michael Branch et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2019)

Article Hospitality, Leisure, Sport & Tourism

A systematic assessment of gaps between academic research and industry participation in hospitality management discipline

Mahmood A. Khan

INTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT (2019)

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Why and How Investors Use ESG Information: Evidence from a Global Survey

Amir Amel-Zadeh et al.

FINANCIAL ANALYSTS JOURNAL (2018)

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ESG performance and firm value: The moderating role of disclosure

Ali Fatemi et al.

GLOBAL FINANCE JOURNAL (2018)

Article Green & Sustainable Science & Technology

Sensitive industries produce better ESG performance: Evidence from emerging markets

Alexandre Sanches Garcia et al.

JOURNAL OF CLEANER PRODUCTION (2017)

Article Business, Finance

Sin Stocks Revisited: Resolving the Sin Stock Anomaly

David Blitz et al.

JOURNAL OF PORTFOLIO MANAGEMENT (2017)

Article Business, Finance

Corporate Social Responsibility, Shariah-Compliance, and Earnings Quality

Abdullah Alsaadi et al.

JOURNAL OF FINANCIAL SERVICES RESEARCH (2017)

Article Business, Finance

Does corporate social responsibility affect mutual fund performance and flows?

Sadok El Ghoul et al.

JOURNAL OF BANKING & FINANCE (2017)

Article Business

Socially Responsible Investment in France

Patricia Crifo et al.

BUSINESS & SOCIETY (2016)

Article Business

ESG Integration and the Investment Management Process: Fundamental Investing Reinvented

Emiel van Duuren et al.

JOURNAL OF BUSINESS ETHICS (2016)

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The effect of social screening on bond mutual fund performance

Hans-Martin Henke

JOURNAL OF BANKING & FINANCE (2016)

Article Green & Sustainable Science & Technology

Can socially responsible investment for cleaner production improve the financial performance of Spanish pension plans?

Carmen-Pilar Marti-Ballester

JOURNAL OF CLEANER PRODUCTION (2015)

Article Management

The association between corporate governance and firm performance - a meta-analysis

Sayla Sowat Siddiqui

INTERNATIONAL JOURNAL OF ACCOUNTING AND INFORMATION MANAGEMENT (2015)

Review Business

Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis

Christophe Revelli et al.

BUSINESS ETHICS-A EUROPEAN REVIEW (2015)

Article Business, Finance

Corporate Social Responsibility and Earnings Quality: International Evidence

Saverio Bozzolan et al.

INTERNATIONAL JOURNAL OF ACCOUNTING (2015)

Review Business, Finance

The wages of social responsibility - where are they? A critical review of ESG investing

Gerhard Halbritter et al.

REVIEW OF FINANCIAL ECONOMICS (2015)

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The value of corporate culture

Luigi Guiso et al.

JOURNAL OF FINANCIAL ECONOMICS (2015)

Article Business, Finance

A five-factor asset pricing model

Eugene F. Fama et al.

JOURNAL OF FINANCIAL ECONOMICS (2015)

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Constant and variable returns to scale DEA models for socially responsible investment funds

Antonella Basso et al.

EUROPEAN JOURNAL OF OPERATIONAL RESEARCH (2014)

Article Green & Sustainable Science & Technology

Socially responsible investment in Malaysia: behavioral framework in evaluating investors' decision making process

Ainul Azreen Adam et al.

JOURNAL OF CLEANER PRODUCTION (2014)

Article Business

Who Needs CSR? The Impact of Corporate Social Responsibility on National Competitiveness

Ioanna Boulouta et al.

JOURNAL OF BUSINESS ETHICS (2014)

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CORPORATE SOCIAL RESPONSIBILITY AND ACCESS TO FINANCE

Beiting Cheng et al.

STRATEGIC MANAGEMENT JOURNAL (2014)

Article Management

Performances of socially responsible investment and environmentally friendly funds

Y. Ito et al.

JOURNAL OF THE OPERATIONAL RESEARCH SOCIETY (2013)

Article Business

Socially Responsible Investing: An Investor Perspective

Thomas C. Berry et al.

JOURNAL OF BUSINESS ETHICS (2013)

Review Environmental Studies

Does Environmental Management Improve Financial Performance? A Meta-Analytical Review

Elisabeth Albertini

ORGANIZATION & ENVIRONMENT (2013)

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Corporate social responsibility in the banking industry: Motives and financial performance

Meng-Wen Wu et al.

JOURNAL OF BANKING & FINANCE (2013)

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Stakeholder relations and stock returns: On errors in investors' expectations and learning

Arian Borgers et al.

JOURNAL OF EMPIRICAL FINANCE (2013)

Article Business

The independent effects of environmental, social and governance initiatives on the performance of UK firms

Jacquelyn E. Humphrey et al.

AUSTRALIAN JOURNAL OF MANAGEMENT (2012)

Article Business, Finance

Size, value, and momentum in international stock returns

Eugene F. Fama et al.

JOURNAL OF FINANCIAL ECONOMICS (2012)

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Profiling socially responsible investors: Australian evidence

Blanca Perez-Gladish et al.

AUSTRALIAN JOURNAL OF MANAGEMENT (2012)

Article Business, Finance

Does it cost to be sustainable?

Jacquelyn E. Humphrey et al.

JOURNAL OF CORPORATE FINANCE (2012)

Article Business, Finance

Is Earnings Quality Associated with Corporate Social Responsibility?

Yongtae Kim et al.

ACCOUNTING REVIEW (2012)

Article Psychology, Applied

Does Human Capital Matter? A Meta-Analysis of the Relationship Between Human Capital and Firm Performance

T. Russell Crook et al.

JOURNAL OF APPLIED PSYCHOLOGY (2011)

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Does Corporate Governance Predict Future Performance? Evidence from Hong Kong

Yan-Leung Cheung et al.

FINANCIAL MANAGEMENT (2011)

Article Development Studies

Corporate Governance and Performance around the World: What We Know and What We Don't

Inessa Love

WORLD BANK RESEARCH OBSERVER (2011)

Review Business, Finance

Corporate governance, accounting and finance: A review

Philip Brown et al.

ACCOUNTING AND FINANCE (2011)

Article Business, Finance

Is ethical money financially smart? Nonfinancial attributes and money flows of socially responsible investment funds

Luc Renneboog et al.

JOURNAL OF FINANCIAL INTERMEDIATION (2011)

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Australian Socially Responsible Funds: Performance, Risk and Screening Intensity

Jacquelyn E. Humphrey et al.

JOURNAL OF BUSINESS ETHICS (2011)

Article Business, Finance

Does corporate social responsibility affect the cost of capital?

Sadok El Ghoul et al.

JOURNAL OF BANKING & FINANCE (2011)

Article Business, Finance

A tale of values-driven and profit-seeking social investors

Jeroen Derwall et al.

JOURNAL OF BANKING & FINANCE (2011)

Article Business, Finance

The impact of corporate social responsibility on the cost of bank loans

Allen Goss et al.

JOURNAL OF BANKING & FINANCE (2011)

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How Hot Is Your Bottom Line? Linking Carbon and Financial Performance

Timo Busch et al.

BUSINESS & SOCIETY (2011)

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The Relationship between Corporate Social Performance and Earnings Management

Rim Makni Gargouri et al.

CANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES-REVUE CANADIENNE DES SCIENCES DE L ADMINISTRATION (2010)

Article Business

Sovereign Bonds and Socially Responsible Investment

Bastien Drut

JOURNAL OF BUSINESS ETHICS (2010)

Article Business, Finance

CFOs and CEOs: Who have the most influence on earnings management?

John (Xuefeng) Jiang et al.

JOURNAL OF FINANCIAL ECONOMICS (2010)

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CORPORATE RESPONSIBILITY AND FINANCIAL PERFORMANCE: THE ROLE OF INTANGIBLE RESOURCES

Jordi Surroca et al.

STRATEGIC MANAGEMENT JOURNAL (2010)

Article Business, Finance

Corporate Governance in China: a Step Forward

Yan-Leung Cheung et al.

EUROPEAN FINANCIAL MANAGEMENT (2010)

Article Business, Finance

Highly Valued Equity and Discretionary Accruals

Robert E. Houmes et al.

JOURNAL OF BUSINESS FINANCE & ACCOUNTING (2010)

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Individual and Corporate Social Responsibility

Roland Benabou et al.

ECONOMICA (2010)

Article Business

Does Social Performance Really Lead to Financial Performance? Accounting for Endogeneity

Roberto Garcia-Castro et al.

JOURNAL OF BUSINESS ETHICS (2010)

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Audit Quality, Corporate Governance, and Earnings Management: A Meta-Analysis

Jerry Lin et al.

INTERNATIONAL JOURNAL OF AUDITING (2010)

Article Business, Finance

Corporate governance and earnings management at large US bank holding companies

Marcia Millon Cornett et al.

JOURNAL OF CORPORATE FINANCE (2009)

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STAKEHOLDER RELATIONS AND THE PERSISTENCE OF CORPORATE FINANCIAL PERFORMANCE

Jaepil Choi et al.

STRATEGIC MANAGEMENT JOURNAL (2009)

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The Wages of Social Responsibility

Meir Statman et al.

FINANCIAL ANALYSTS JOURNAL (2009)

Article Business

The Heterogeneity of Socially Responsible Investment

Joakim Sandberg et al.

JOURNAL OF BUSINESS ETHICS (2009)

Article Business, Finance

The price of sin: The effects of social norms on markets

Harrison Hong et al.

JOURNAL OF FINANCIAL ECONOMICS (2009)

Article Business

The Performance of European Socially Responsible Funds

Maria Ceu Cortez et al.

JOURNAL OF BUSINESS ETHICS (2009)

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Measuring Corporate Social Responsibility: A Scale Development Study

Duygu Turker

JOURNAL OF BUSINESS ETHICS (2009)

Article Business, Finance

What Matters in Corporate Governance?

Lucian Bebchuk et al.

REVIEW OF FINANCIAL STUDIES (2009)

Article Business, Finance

Socially Responsible Fixed-Income Funds

Jeroen Derwall et al.

JOURNAL OF BUSINESS FINANCE & ACCOUNTING (2009)

Article Business, Finance

The price of ethics and stakeholder governance: The performance of socially responsible mutual funds

Luc Renneboog et al.

JOURNAL OF CORPORATE FINANCE (2008)

Article Business

The investment performance of socially responsible investment funds in Australia

Stewart Jones et al.

JOURNAL OF BUSINESS ETHICS (2008)

Article Business, Finance

Analyst coverage and earnings management

Fang (Frank) Yu

JOURNAL OF FINANCIAL ECONOMICS (2008)

Article Business

Board independence and real earnings management: The case of R&D expenditure

Beatriz Garcia Osma

CORPORATE GOVERNANCE-AN INTERNATIONAL REVIEW (2008)

Article Business, Finance

The stocks at stake: Return and risk in socially responsible investment

Rients Galema et al.

JOURNAL OF BANKING & FINANCE (2008)

Article Economics

Do stock prices reflect the corporate governance quality of Japanese firms?

Hiroyuki Aman et al.

JOURNAL OF THE JAPANESE AND INTERNATIONAL ECONOMIES (2008)

Article Business, Finance

Board of Directors and Opportunistic Earnings Management: Evidence from India

Jayati Sarkar et al.

JOURNAL OF ACCOUNTING AUDITING AND FINANCE (2008)

Article Business, Finance

Socially responsible investments: Institutional aspects, performance, and investor behavior

Luc Renneboog et al.

JOURNAL OF BANKING & FINANCE (2008)

Article Business, Finance

Socially responsible investment funds: Investor reaction to current and past returns

Kareii L. Benson et al.

JOURNAL OF BANKING & FINANCE (2008)

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Performance of ethical mutual funds in Spain: Sacrifice or premium?

Angeles Fernandez-Izquierdo et al.

JOURNAL OF BUSINESS ETHICS (2008)

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The Evolution of Shareholder Activism in the United States

Stuart L. Gillan et al.

JOURNAL OF APPLIED CORPORATE FINANCE (2007)

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The effect of the board composition and its monitoring committees on earnings management: evidence from Spain

Beatriz Garcia Osma et al.

CORPORATE GOVERNANCE-AN INTERNATIONAL REVIEW (2007)

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2005 report on socially responsible investing trends in the United States

Alexander Kempf et al.

EUROPEAN FINANCIAL MANAGEMENT (2007)

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Earnings management and corporate governance in Asia's emerging markets

Chung-Hua Shen et al.

CORPORATE GOVERNANCE-AN INTERNATIONAL REVIEW (2007)

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Mutual fund attributes and investor Behavior

Nicolas P. B. Bollen

JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS (2007)

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Ownership structure, discretionary accruals and the informativeness of earnings

Juan Pedro Sanchez-Ballesta et al.

CORPORATE GOVERNANCE-AN INTERNATIONAL REVIEW (2007)

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Corporate governance, accounting outcomes, and organizational performance

David F. Larcker et al.

ACCOUNTING REVIEW (2007)

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Corporate social responsibility and socially responsible investing: A global perspective

Ronald Paul Hill et al.

JOURNAL OF BUSINESS ETHICS (2007)

Article Business, Finance

Do firms understate stock option-based compensation expense disclosed under SFAS 123?

David Aboody et al.

REVIEW OF ACCOUNTING STUDIES (2006)

Article Business, Finance

CEO incentives and earnings management

Daniel Bergstresser et al.

JOURNAL OF FINANCIAL ECONOMICS (2006)

Article Economics

Your morals might be your moods

G Kirchsteiger et al.

JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION (2006)

Article Business, Finance

Board monitoring and earnings management: Do outside directors influence abnormal accruals?

KV Peasnell et al.

JOURNAL OF BUSINESS FINANCE & ACCOUNTING (2005)

Article Business, Finance

International evidence on ethical mutual fund performance and investment style

R Bauer et al.

JOURNAL OF BANKING & FINANCE (2005)

Article Business, Finance

Corporate social responsibility: An economic and financial framework

G Heal

GENEVA PAPERS ON RISK AND INSURANCE-ISSUES AND PRACTICE (2005)

Article Business, Finance

Equity incentives and earnings management

Q Cheng et al.

ACCOUNTING REVIEW (2005)

Article Business, Finance

The market valuation of environmental capital expenditures by pulp and paper companies

PM Clarkson et al.

ACCOUNTING REVIEW (2004)

Article Business

Can the UK experience provide lessons for the evolution of SRI in Japan?

A Solomon et al.

CORPORATE GOVERNANCE-AN INTERNATIONAL REVIEW (2004)

Article Business, Finance

Earnings management and corporate governance: the role of the board and the audit committee

B Xie et al.

JOURNAL OF CORPORATE FINANCE (2003)

Article Business

The ethics of ethical investing

MS Schwartz

JOURNAL OF BUSINESS ETHICS (2003)

Review Management

Corporate social and financial performance: A meta-analysis

M Orlitzky et al.

ORGANIZATION STUDIES (2003)

Article Economics

Corporate governance and equity prices

P Gompers et al.

QUARTERLY JOURNAL OF ECONOMICS (2003)

Article Business, Finance

Audit committee, board of director characteristics, and earnings management

A Klein

JOURNAL OF ACCOUNTING & ECONOMICS (2002)

Article Business, Finance

The effect of green investment on corporate behavior

R Heinkel et al.

JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS (2001)