Over the past five years, Sovereign Wealth Funds (SWFs) have become a prominent phenomenon in contemporary capitalism. Described as government investment vehicles that invest state wealth in financial markets, the majority of the world's 60-plus funds have been established since the year 2000. Despite extensive treatments of SWFs' geopolitical and international significance, ethical and domestic level analyses are sparse. In response, this thesis interrogates three key normative questions raised by the funds for the domestic citizen-state relationship: (1) How (and by whom) should sovereign funds be managed? (2) How should sovereign wealth be invested? (3) How should the earnings of sovereign fund investment be distributed? In answering these questions, this thesis aims to dispel ambiguity over the ownership status of sovereign funds, evident in popular and academic discourse and within communities that establish these entities. For this task, it draws on recently revived fiduciary theory of the citizen-state relationship to argue that the rightful owner of these funds is the citizenry - not states or governments who enjoy physical and legal possession of SWFs. It goes on to examine the implications of this fiduciary state conception of SWF ownership, asking how citizen-owners should enjoy control over and benefit from the distinct constituent parts of their SWF property: the institution of the fund, the underlying sovereign wealth and the financial returns earned on the investment of its assets. The model of citizen ownership defended demands substantially increased popular control over SWF management and the investment of sovereign wealth, as well as direct benefit rights for citizen-owners to fund income through individualised distribution of investment returns. Examination of existing practice among SWFs demonstrates that this normative ideal is far, although not impossibly distant from current institutional practice.

ESG (Environmental, social, and governance) investing is an investment philosophy to inform holistic and sound decision-making of investors for the purposes of both, nourishing a stable economy with acceptable rates of return while at the same time addressing stakeholders' non-financial concerns to preserve an inhabitable planet. Some scholars in finance argue that institutions subject to norms, i.e. responsible investors pay a financial cost from engaging in ESG activities. Moreover, they see ESG investing as distracting, inappropriate, risky and legally challenging. In response, several studies have emerged to show that ESG investing is a growing interest with investors, helps to mitigate financial risks, and does not need to represent a financial cost. Despite convincing evidence in a growing body of academic literature, many questions are still open to debate. Therefore, the principal objective of this thesis is to explore three dimensions of ESG investing, namely corporate environmental responsibility, renewable energy, and ESG disclosure quality. The research questions address issues relating to pension funds' investment decisions and legal obstacles resulting from utilising ESG information, financial return and risk implications of investing in renewable energy, substitutability of renewable energy for fossil fuel investments, and the effects of ESG disclosure quality on the expected cost of capital. To answer these questions, the thesis employs several standard and alternative empirical methods from the asset pricing and risk literatures. The thesis concludes the following. First, the integration of environmental responsibility into pension fund investment decision-making processes does not impede the financial and risk performance of pension funds. This means that pension funds should be allowed to consider such information in their investment decision making processes as the information does not reduce the overall financial return of the tested portfolios and does not violate trust law, i.e. the Employee Retirement Income Security Act (ERISA). Pension fund trustees have been prohibited to consider any non-financial criteria such as environmental, social, or governance criteria in their investment processes under trust law such as ERISA, when they could harm the finanical performance of the portfolio. To be more specific, a pension fund trustee breaches his fiduciary duties (the duty of loyalty and the duty of prudence), if he sacrifices the financial well-being of the pension fund for pursuing any other social goal (Langbein and Posner, 1980). In particular, the duty of loyalty is "... forbidding the trustee to invest for any object other than the highest return consistent with the preferred level of portfolio risk" (Langbein and Posner, 1980:98). Second, the thesis finds no evidence for sustained renewable energy equity premia. Furthermore, investments in renewable energy equity are considerably riskier than in fossil fuel energy equity, meaning that renewable energy firms are undergoing a period of high uncertainties related to their business model, low carbon prices, and lacking public and private infrastructure investment (Bohl et al., 2013; Kumar et al., 2012; Sadorsky, 2012b ). Finally, my thesis shows that companies with high ESG disclosure quality experience lower expected cost of equity and cost of debt financing, everything else equal.

En lien avec l’essor du développement durable et de la Responsabilité Sociale des Entreprises (RSE), les enjeux de durabilité sont devenus une tendance forte du secteur immobilier. Cette thèse examine l’immobilier durable et explore la valeur que diverses parties prenantes y associent. Chacun des cinq chapitres se concentre sur différents acteurs pour étudier leurs perceptions de l’immobilier durable et la manière dont elles façonnent leurs pratiques. Le premier chapitre questionne le concept de valeur associée aux bâtiments durables. Le second chapitre examine les stratégies de création de valeur liées à l’immobilier durable à l’échelle des foncières. Les troisième et quatrième chapitres portent respectivement sur la diffusion des certifications environnementales et leur valeur de marque pour les entreprises utilisatrices. Le cinquième chapitre explore l’impact des préoccupations croissantes liées au développement durable sur la gestion de long terme du stock de bâtiments existants. / In relations with the rising concerns on sustainable development and Corporate Social Responsibility (CSR), sustainability-related topics have become a key trend in the real estate sector. This dissertation examines sustainable real estate, and investigates more particularly the value it holds for various stakeholders. Each of the five chapters focuses on different market players to analyse how sustainability-related topics are perceived, and the extent to which these perceptions shape practices. Chapter 1 questions the notion of value associated with sustainability-related features at a building level. Chapter 2 examines the value creation strategies associated with sustainability-related topics at corporate level. Chapters 3 and 4 focus respectively on the diffusion of sustainability certification schemes, and occupiers’ perceptions of their brand value. Chapter 5 explores the impacts of sustainability-related trends on the long term management of the building stock.

Magister Legum - LLM

Cette thèse examine les relations, et particulièrement les interactions, entre la responsabilité sociale des entreprises et leur risque financier. Elle propose un schéma conceptuel de ces relations et 4 études empiriques. La première examine les relations entre la performance sociétale, mesurée par les scores Vigeo, et le risque financier de 544 entreprises de l'indice Stoxx Europe 600, de 2004-2011. Elle montre que les entreprises les plus performantes du point de vue sociétal ont un risque spécifique et total faible, et une volatilité du taux de rentabilité (Roa) moindre, notamment pour les ressources humaines. La relation est positive et fortement significative si l'on considère le bêta du titre et la dispersion des prévisions des analystes. La deuxième étude porte sur la réaction des marchés financiers européens à l'émission d'alertes sociétales. Elle analyse l'apport informationnel de ces alertes par rapport à l'annonce publique des évènements qui les ont déclenchées. L'analyse de 480 alertes émises par Vigeo de 2004 à 2011 montre que les investisseurs réagissent positivement à la première alerte pour une entreprise donnée. L'alerte réduit l'asymétrie d'information entre managers et investisseurs ; en limitant le risque d'estimation des investisseurs, elle diminue leur incertitude. Les alertes relatives à l'environnement constituent un cas particulier, dans la mesure où elles ont un impact négatif sur les cours. La troisième étude teste et valide la théorie du management du risque : en cas d'occurrence d'un risque RSE (référencé par Vigeo) les entreprises les plus performantes du point de vue sociétal enregistrent des rentabilités anormales moins importantes et leur volume anormal est plus faible. La quatrième étude examine l'interaction entre risque financier et engagement RSE. Elle dépasse l'échelle européenne en considérant 23 194 observations d'Asset4 au sujet de 3 787 entreprises dans 67 pays. Elle montre que de bonnes performances ESG réduisent significativement le risque financier, spécifique et total, ainsi que la volatilité du Roa, et que les performances ESG sont positivement associées au risque si l'on considère le bêta du titre et la dispersion des prévisions des analystes. Elle met en évidence un cercle vertueux entre performance ESG et risque financier. Les pratiques sociales et de gouvernance réduisent le plus fortement ce risque. Un faible risque financier incite l'entreprise à investir en priorité dans des mesures environnementales et de gouvernance, puis dans le social.Mots clés: Risque financier de l'entreprise, responsabilité sociale de l'entreprise (RSE), Risque RSE, performance sociétale, interaction. / This dissertation examines the relations between Corporate Social Responsibility and financial risk, with a particular focus on their interactions. It proposes a conceptual scheme of these relations and 4 empirical studies. The first study examines the relation between the corporate social performance, measured by Vigeo scores, and the financial risk of 554 companies pertaining to the Stoxx Europe 600 Index, from 2004-2011. It shows that companies with higher corporate responsibility have lower specific and total risks, and lower volatility of return on assets (Roa), particularly in human resources. The relation is positive and strong when we consider the investments' beta and the analysts' forecasts dispersion. The second study examines the reaction of the European stock market to CSR alerts. It examines the alerts' informational contribution compared to the public announce¬ments of the triggering events. Based on a sample of 480 alerts released by Vigeo over the period 2004-2011, we find a positive stock market reaction to the first alert for the affected company. The alert reduces the information asymmetry between managers and investors. It limits the investors' estimation risk and thus their uncertainty. Environmental alerts are a specific case, as they affect negatively the stock prices. The third study tests and confirms the risk management theory: when a CSR risk occurs (referenced by Vigeo), higher CSR performers have lower abnormal returns and lower abnormal trading volumes. The fourth study examines the interaction between financial risk and CSR commitment. It goes beyond Europe by considering 23,194 Asset4 scores related to 3,787 companies in 67 countries. It shows that prior aggregate ESG scores are associated with reduced subsequent specific and total risks and Roa volatility, thus confirming that high ESG performers have lower financial risk. CSR performances are positively associated with the risk if we consider the investments' beta and the analysts' forecasts dispersion. The study evidences a virtuous cycle between financial risk and ESG performance. Social and governance performances contribute more significantly to reduce this risk. Prior low financial risks incite firms to invest in CSR, first in environmental and governance, then in social policies or activities.Keywords: Financial risk, corporate social responsibility, corporate social performance, corporate social responsibility risk, interaction.

Cette thèse évalue la performance financière de l'investissement socialement responsable (ISR). Dans le but de surmonter le manque de consensus sur le thème de recherche, nous proposons d'aborder la question sous l'angle de la généralisation à travers une approche méta-analytique ayant pour objectif de démontrer un lien de cause à effet entre ISR et performance financière (ou boursière). A travers l'étude d'un corpus empirique d'observation incluant 75 études (161 expérimentations) sur la période 1972-2009 sélectionnées sur la base de notre propre typologie définitionnelle de l'ISR, nous articulons notre recherche autour de deux études : exploratoire et approche méta-analytique.L'étude exploratoire fournit ainsi, via l'utilisation de tests non paramétriques (Chi-deux) et de l'analyse de données (analyse factorielle des correspondances simple et multiple, classification ascendante hiérarchique), des typologies d'effet ISR sur la performance financière regroupant natures d'impact ISR sur la performance (positif, négatif ou neutre) et modalités de variables méthodologiques (marché ISR, méthode de comparaison de données, mesure de la performance financière…). L'approche méta-analytique (la première dans le champ de recherche) explore la relation entre ISR et performance financière sur un corpus réduit (61 études / 123 expérimentations). Les résultats observés tendent à prouver que l'éthique n'a pas de coût financier et génère des rentabilités similaires (voire légèrement supérieure) à celle de l'investissement conventionnel. Nous observons également que les choix empiriques effectués par les auteurs influencent considérablement la nature de la performance financière de l'ISR. / This thesis evaluates the financial performance of socially responsible investment (SRI). In the purpose of overcoming the lack of consensus on the research theme, we propose to approach the question under the angle of generalization across a meta-analytical approach, aiming to demonstrate a link between SRI and financial performances (or stock exchange performance) and identify the methodological determinants of this causal relationship. Across the study of an empirical corpus observation, including 75 studies (161 experimentations) across the 1972-2009 period, all selected on the basis of our own typological definition of SRI, we articulate our research around two studies : exploratory and meta-analytical approach.By the use of non-parametric tests (chi square), and of data analysis (simple and multiple correspondence analysis, ascending hierarchical clustering), the exploratory study provides typologies of SRI effects on the financial performance, gathering the nature of SRI impacts on performance (positive, negative or neutral) ant the terms of methodological variables (SRI market, data comparison method, financial performance measure...). The meta-analytical approach (first one in the field of research) explores the relation between SRI and financial performance on a reduced corpus (61 studies / 123 experimentations). The results we observed tend to prove that ethics has no financial cost and generates similar profitability (even slightly more) than a conventional investment. We also observe that the empirical choices made by the authors have a considerable influence on the nature of the ISR financial performance.

Thesis (MCOM.) -- University of Limpopo, 2019 / Responsible investment combines shareholder’s objective of financial performance with environmental, social and governance (ESG) issues when making investment decisions. Responsible investment has become necessary because most companies neglect the impact of their operation on the environment; society while focusing on short-term profits. Moreover, the collapse of big companies due to poor governance also demand that they focus on the need to strengthen good corporate governance. This study examines whether SA mutual funds companies listed on the JSE incorporate environmental, social and governance (ESG) factors in making investment decisions. The study further examines the relationship between selected ESG factors and financial performance measured using ROE. A total of 28 companies where SA mutual fund companies have invested their funds were sampled and studied between 2007 and 2017. Secondary data was used whereby raw data was collected from the annual, integrated and sustainability reports of the selected companies’ websites and the IRESS database. Although many ESG factors could influence responsible investment such as climate change, waste and pollution, deforestation, working conditions, local community, bribery and corruption, however, some of these factors cannot be easily quantified. Hence, this study focused on one component per ESG factor that can be quantified. All these factors are required to have a deeper understanding of responsible investment. This study adopts the quantitative research method and adds to the growing number of studies by examining the relationship between independent variables represented by water usage (environmental), employee health and safety cost (social) and gender diversity (governance) and dependent variable which is financial performance measured by ROE. The Stata statistical software utilising the panel data method was used to analyse the data. The iii | Page study results show a positive and insignificant relationship between water usage and ROE, a positive an insignificant relationship between employee health and safety cost (number of work-related fatalities) and ROE and negative and insignificant relationship between the percentage of women on corporate boards and ROE. The results show that UN PRI guideline that encourages responsible investments is not followed by South African (SA) mutual fund companies. This study recommends that SA mutual funds companies follow the UN PRI educate different stakeholders as to the importance of incorporating ESG factors in business operations and the benefits thereof. Future studies can consider incorporating ESG indicators other the ones presented in this study.

Purpose – BecauseThe purpose of this thesis is to investigate what methods financial institutions use to inform and encourage their existing and potential clients to choose more sustainable and responsible investment alternatives. The thesis should also identify some key determinants of private investors’ choice of sustainable and responsible investments (SRI), with focus on the effect of limited knowledge and access to information about SRI has on private investors’ choice. Methodology – In this thesis, both qualitative and quantitative research methods are used to collect significant data. Qualitative data was collected through interviews with three representatives from different financial institutions. A questionnaire was distributed and answered by 36 respondents. Quantitative data was collected using a questionnaire, the processed and analyzed by using a comparison analysis of percentages. Findings – Overall, the thesis finds that financial institutions have limited focus on private investors and lack of concrete methods to provide private investors with relevant information and thus increasing the level of knowledge about SRI. Furthermore, the results indicate that earning steady financial returns by considering social responsibility is one of the motivations to invest in SRI. Women are more likely to choose SRI than men and millennials prefer SRI more compared to other generations. Limited knowledge and limited access to useful information are considered as strong obstacles for private investors when considering SRI. Research limitations – Since the sample size was very small, it’s probable that the respondents’ opinions and approach to SRI cannot represent the view of the entire population. Because of the sample size there’s an enormous variation in response patterns. Therefore, the results and conclusions need to be taken cautiously. / Syfte – Syftet med denna uppsats syfte är att undersöka vilka metoder som finansiella institutioner använder för att upplysa och uppmuntra både befintliga och potentiella kunder att välja mer hållbara och ansvarsfulla investeringsalternativ. Uppsatsen ska även identifiera faktorer som påverkar privata investerares val av hållbara och ansvarsfulla investeringar, med fokus på effekten av begränsad kunskap och tillgång till information. Metod/tillvägagångssätt – I denna studie har både kvalitativa och kvantitativa forskningsmetoder använts för att samla in data. Kvalitativa data samlades in genom intervjuer med tre representanter från olika finansiella institutioner. En enkät har distribuerats och besvarats av 36 respondenter. Kvantitativa data insamlades med hjälp av ett frågeformulär, sedan bearbetades och analyserades informationen med hjälp av en jämförelse av procentsatser. Iakttagelser – Sammantaget finner tesen att finansiella institutioner har begränsad fokus på privata investerare och bristen på konkreta metoder för att ge privata investerare med relevant information och därmed öka kunskapsnivån om SRI. Vidare tyder resultaten på att jakten efter stabil avkastning på längre sikt, genom att ta samhällsansvar är den främsta motivationen att investerare väljer SRI. Kvinnor och millenniegeneration är mer benägna att välja SRI än män och andra generationer. Begränsad kunskap och tillgång till relevant information betraktas som en stark barriär för privata investerare att välja SRI. Forskningsbegränsningar – På grund av att urvalets storlek är väldigt liten, är det troligt att de svarandes åsikter och förhållningssätt till SRI inte kan representera hela befolkningen. Urvalets storlek gör också att det finns stora variationer i svarsmönster. Därför bör resultaten och slutsatserna tas med stor försiktighet.

Pensions funds represent the collective savings of millions of people and the decisions and actions they take can be greatly beneficial or detrimental to the global economy, society, and the lives of people around the world. The aim of this project is to investigate the possibilities of citizen participation in relation to responsible investment in UK occupational pension funds, and what the barriers and opportunities are for citizens, in this context pension holders, to participate in financial decisions made on their behalf. The research questions focus on the arguments for and against such participation, in general and in relation to using an online voting platform. Qualitative interviews with Responsible Investment Advocates are used to scope ideas around participation, and the study is grounded in a social constructionist theory of meaning. This project sits at the intersection of two fields: Responsible Investment and Participatory Communication for Social Change. The main findings of this project are that RI Advocates disagree over the necessity for such citizen participation, as a process for change and as a goal. The perceived benefits of citizen participation ranged from empowerment, accountability, power redistribution and structural change. Barriers to participation exist based upon the current investment system, with the main barrier perceived as a lack of demand from the investment industry, wider civil society, and significantly citizens. It was stated in interviews that citizen participation is a relatively ignored area within Responsible Investment, and therefore much can be learned from existing C4D research and practice.

Socially responsible investing has presented itself as a growing, multifaceted, advanced and sophisticated investment philosophy. Socially responsible investment (SRI) involves incorporating social, ethical and responsible investment objectives with financial investment objectives during the investment decision-making process. Social, ethical and responsible investment objectives are set in line with environmental, social and corporate governance (ESG) criteria which are established within the SRI strategy followed. SRI strategies include screening (negative, positive and best-of-sector), shareholder activism and cause-based investing. Although international SRI markets such as that of the United States of America and the United Kingdom are sophisticated and established markets, the South African SRI market is still relatively new and is yet to reach its full potential. Thus, as a growing market, little research regarding the long term risk-adjusted performance of SRI funds in South Africa has been conducted. The long term risk-adjusted performance of the sample of SRI funds was measured through the use of five risk-adjusted performance measures, namely the Treynor ratio, Sharpe ratio, Jensen’s alpha, Sortino ratio and Omega ratio, and through the use of three performance measurement models which included the capital asset pricing model (CAPM), Fama-French three-factor model and Carhart four-factor model. The risk-adjusted performance of the sample of SRI funds was measured with the intent to establish if these funds out- or underperformed against three benchmark categories, namely the Financial Times Stock Exchange/Johannesburg Stock Exchange (FTSE/JSE) SRI Index, a matched sample of conventional investment (non-SRI) funds and the FTSE/JSE All Share Index. The probable effect of the 2007/08 global financial crisis was also measured to analyse whether such a hazardous market event affected the performance of the SRI funds. According to the results and findings, the risk-adjusted performance of the SRI funds has improved over the research period. However, the SRI funds neither outperformed nor underperformed against the three benchmark categories over the research period. The performance measurement models’ analysis indicated that the SRI funds were less sensitive to market fluctuations, more exposed to small capitalisation portfolios, more growth-oriented, and exhibited significant momentum after the period of the 2007/08 global financial crisis. Furthermore, the analysis indicated that the SRI funds significantly underperformed against the non-SRI funds during the Performance of socially responsible investment funds in South Africa research period. Mixed results were obtained with regards to the probable effect of the 2007/08 global financial crisis on the performance of the SRI funds.