Socially Responsible Investment Sebagai Motif Penerapan Sustainable Corporate Social Responsibility

Socially responsible investment (SRI) usually known as sustainable or ethical or green investment is a new type of investment movement in response to social expectations of investors. Social investors are people who want to improve conditions in society by investing their money in shares or mutual fund from companies that doing their practices in environmental, social and governance issues. Thus, SRI is investing that is mindful of the impact on environmental and society of that investment. It is often described to investors as allowing them "to doll by doing goods”. SRI that integrates environmental, social and governance factors into investment decisions, encourage corporations doing Corporate Social Responsibility (CSR) as a part of their strategic business. CSR is a commonly used term today.CSR is about a sustainable commitment by business to behave ethically and contribute to economic development while improving the quality of life of the community and society and doing environmental preservation. With the globalization of the economy, such issues as environmental degradation and violations of human rights are cause social investors to encourage SRI to grow rapidly. And today's SRI trends in Global Market reveal how SRI is growing in revenue and making Corporate Social Responsibility happen. Therefore, SRI investors had an important role to encourage corporations to improve their practices environmental, social and governance issues as a continuing CSR. Key words: Socially Responsible Investmen

Sovereign Bonds and Socially Responsible Investment

While the literature on Socially Responsible Investment (SRI) is mainly focused on the stock market, little attention has been paid to SRI in sovereign bonds. This paper investigates the effect of taking into account socially responsible indicators for countries, the Vigeo Sustainability Ratings (VSR), on the efficient frontier formed with the sovereign bonds of twenty developed countries. It shows that it is possible to increase the portfolios’ VSR rating without significantly harming the risk/return relationship. The analysis then focuses on specific ratings relating to a) the environment, b) social concerns, and c) public governance. The results suggest that socially responsible portfolios of sovereign bonds can be built without a significant diversification cost.Socially Responsible Investment, Sovereign Bonds, Portfolio Selection, Rating, Spanning Tests, Mean-variance efficiency, Portfolio Choice

Socially Responsible Investment in Japanese Pensions

As the level of retirement-related assets has grown, so too has public and private interest in so-called "Socially Responsible Investment" (SRI), an investment strategy that employs criteria other than the usual financial risk and return factors when selecting firms in which to invest. This study evaluates whether SRI indexes would alter portfolio risk and return patterns for the new defined contribution pension plans currently on offer in Japan. We conclude that SRI funds can be included as an option, albeit with some cost; consequently, mandatory investment in SRI portfolios cannot reasonably be justified.

Socially Responsible Investment in General Equilibrium

Socially responsible investment in analyzed in a general equilibrium context. This is important in order to understand the ultimate consequences of SRI on the decisions of economic agents. Building on models by Brock (1982) and Merton (1987), SRI is modelled as the choice to voluntarily give up investment in stocks and bonds issues by a firm producing an externality. The model is used to analyze the utility costs of SRI to the responsible investor and the impact on the price of the stock issued by the firm which is responsible for the externality. The results shed light on the factors which may magnify or reduce the impact of SRI, among which are crucial the wealth commended in relative terms by the responsible agents and the diversification possibilities offered by the firms which are excluded from the investment opportunity set. A set of firms targeted by SRI may be seriously affected by SRI only if the responsible investors command a large portion of overall wealth; moreover the same firms are more likely to be hit by SRI behavior if they do not represent important diversification instruments. Firms with unique characteristics from the point of view of overall diversification are less likely to be the target of SRI.General equilibrium, Redistributive effects, Public goods

Socially Responsible Investment Sebagai Motif Penerapan Sustainable Corporate Social Responsibility

Socially responsible investment (SRI) usually known as sustainable or ethical or green investment is a new type of investment movement in response to social expectations of investors. Social investors are people who want to improve conditions in society by investing their money in shares or mutual fund from companies that doing their practices in environmental, social and governance issues. Thus, SRI is investing that is mindful of the impact on environmental and society of that investment. It is often described to investors as allowing them "to doll by doing goods”. SRI that integrates environmental, social and governance factors into investment decisions, encourage corporations doing Corporate Social Responsibility (CSR) as a part of their strategic business. CSR is a commonly used term today.CSR is about a sustainable commitment by business to behave ethically and contribute to economic development while improving the quality of life of the community and society and doing environmental preservation. With the globalization of the economy, such issues as environmental degradation and violations of human rights are cause social investors to encourage SRI to grow rapidly. And today\u27s SRI trends in Global Market reveal how SRI is growing in revenue and making Corporate Social Responsibility happen. Therefore, SRI investors had an important role to encourage corporations to improve their practices environmental, social and governance issues as a continuing CSR

Do Socially Responsible Investment Indexes Outperform Conventional Indexes?

The question of whether more socially responsible (SR) firms outperform or underperform other conventional firms has been debated in the economic literature. In this study, using the socially responsible investment (SRI) indexes and conventional stock indexes in the US, the UK, and Japan, first and second moments of firm performance distributions are estimated based on the Markov switching model. We find two distinct regimes (bear and bull) in the SRI markets as well as the stock markets for all three countries. These regimes occur with the same timing in both types of market. No statistical difference in means and volatilities generated from the SRI indexes and conventional indexes in either region was found. Furthermore, we find strong comovements between the two indexes in both regimes

Delegated Portfolio Management with Socially Responsible Investment Constraints

We consider the problem of how to set a compensation for a portfolio manager who is required to restrict the investment set, as it happens when applying socially responsible screening. This is a problem of Delegated Portfolio Management where the reduction of the investment opportunities to the subset of sustainable assets involves a loss in the expected earnings for the portfolio manager, compensated by the investor through an extra bonus on the realized return. Under simple assumptions on the investor, the manager and the market, we compute the optimal bonus as a function of the manager's risk aversion and his expertise, and of the impact of the portfolio restriction on the Mean Variance efficient frontier. We conclude by discussing the problem of selecting the best managers when his ability is not directly observable by the investor.Delegated portfolio management; Socially responsible investment; Incentives; Extrinsic incentives; Intrinsic motives

Do Socially Responsible Investment Indexes Outperform Conventional Indexes?

The question of whether more socially responsible (SR) firms outperform or underperform other conventional firms has been debated in the economic literature. In this study, using the socially responsible investment (SRI) indexes and conventional stock indexes in the US, the UK, and Japan, first and second moments of firm performance distributions are estimated based on the Markov switching model. We find two distinct regimes (bear and bull) in the SRI markets as well as the stock markets for all three countries. These regimes occur with the same timing in both types of market. No statistical difference in means and volatilities generated from the SRI indexes and conventional indexes in either region was found. Furthermore, we find strong comovements between the two indexes in both regimes.Socially responsible investments; Markov switching model; Maximum likelihood estimations; Return and volatilities; Bear and bull market

Socially Responsible Investment to Japanese Companies

Recently, Socially Responsible Investment, which is a policy of investment regarding with companies' social, environmental and moral value, attracts attention of investors. However, there are little data to explain the effectiveness of the SIR in Japan. In this paper we report the relation between environmental management and stock price of Japanese companies

How Responsible is Socially Responsible Investment?

This paper examines the pros and cons of Socially Responsible Investment (SRI) practices. It provides an overview of the issues at stake, highlighting the difficulties of definition, the reasons to conduct socially orientated investments, the factors which have made SRI a serious matter of relevance in the mainstream investment industry, the appropriateness of SRI regulations, the investment performance of SRI, and the suitability of SRI in Asia