The study critically reviews the application of the Sharia investment screening process, from both Sharia and practical perspectives. In practice, there appears to be inconsistencies in the Sharia investment screening criteria among Islamic investment institutions, especially in terms of the tolerance level, as well as the changing of the Sharia rules. This certainly affects the confidence in the Sharia screening criteria standards, which might adversely affect the Islamic mutual funds industry. The non-income generating aspects, such as social and environmental concerns, are not incorporated in the contemporary Islamic investment screening process. This seems to be rather paradoxical, since it contradicts the Sharia-embedded ethical values of fairness, justice and equity. The thesis contends that external audits regarding the implementation of Sharia rules should be adopted to ensure the compliance of the investment with Sharia guidelines. Furthermore, it is desirable for Sharia boards to adopt corporate governance practice and take proactive roles, especially in Muslim countries, in order to influence companies to adopt Sharia-compliant investment practices. The tolerance levels of conventional finance activities of companies in Muslim countries should be re-evaluated and lowered in the Islamic investment screening criteria. This is partly due to the popularity and wide availability of Islamic banking and alternative Sharia instruments to interest-based finance, coupled with the fact that Muslim shareholders form the majority and hence, can vote to influence companies to adopt Sharia-compliant financing modes. In addition, the study provides empirical evidence that the Sharia screening process does not seem to have an adverse impact on either the absolute or the risk-adjusted performance of Islamic equity mutual funds in Saudi Arabia, compared to their conventional counterpart equity mutual funds and also compared to their market benchmarks. This is regardless of the geographical investment focus subgroup examined and the market benchmark used (whether Islamic or conventional). Furthermore, the systematic risk analysis shows that in most cases Islamic equity mutual funds in Saudi Arabia tend to be significantly less exposed to market risk compared to their conventional counterpart equity mutual funds, and compared to their conventional market benchmarks. Thus, the assumption that Sharia investment constraints lead to inferior performance and riskier investment portfolios because of the relatively limited investment universe seems to be rejected. This implies that Muslim investors in Saudi Arabia can choose Islamic investments that are consistent with their beliefs without being forced to either sacrifice performance or expose themselves to higher risk. The investment style analysis also shows that the Sharia screening process does not seem to influence Islamic equity mutual funds in Saudi Arabia towards small or growth companies compared to their conventional counterparts of similar geographical investment focus. Moreover, the study provides empirical evidence that the performance difference between Islamic and conventional socially responsible indices is insignificant despite applying different sets of screening criteria. However, Islamic indices tend to be associated with relatively lower systematic risk compared to their conventional socially responsible counterparts. Therefore, Islamic investment portfolios can be marketed to socially responsible investors who share similar beliefs in terms of excluding certain industries such as tobacco, alcohol, pornography, defense, etc., in spite of no financial filters being used by conventional socially responsible investors. This finding is especially appealing in Muslim countries where there are usually no mutual funds categorized as socially responsible, but rather Islamic. Moreover, the study also provides empirical evidence that incorporating conventional sustainability criteria into the traditional Sharia screening process does not lead to inferior performance or higher exposure to systematic risk. The results indicate that regardless of the restriction used - whether Islamic, socially responsible or Islamic socially responsible - restricted investment portfolios do not seem to be associated with inferior performance or higher exposure to risk. This finding opens the door for Sharia scholars and Muslim investors to reconsider broader social and environmental aspects as part of the Sharia investment screening process. With regards to investment style, Islamic and Islamic socially responsible indices seem to be skewed towards growth cap as compared to their conventional and conventional socially responsible indices, while Islamic socially responsible also leans towards a large cap. This implies that despite the performance similarity between, Islamic, conventional and conventional socially responsible indices, the returns driver of each type of investment tends to be different.

Identifying factors that affect the flow of mutual fund capital and betweenmutualfund types hasthe potential, among others,to relief fund management and investors from unnecessary administrative costs. This study investigated the role media reported weather shocks have on socially responsible and conventional mutual trust funds’capital flow.The study also has compared the magnitude of influence media reported weather shocks has on capital flow between socially responsible-and convectional mutualtrustfunds.It gives conclusionafter empirically studying all accessible socially responsible mutual trust fundswith relevant accessible financial data, originated, and actively traded in the Swedish financial market with the Swedish currency (Kronor) as well as taking conventional mutual trustfundswith similar maturity. And, the study result shows that media reported weather shocks has statistically significant role in the flow of capital, on bothsocially responsible-and conventional mutual funds in Sweden. It also shows that there is no significant difference in the role media reported weather shocks play between the two fundtypes. The result is concurrent with Hirshleifer & Shumway (2003)’s study which indicate that weather affecting investors mood and behavior. The result is interesting as it implicates to the psychological and emotional factorsplaying a significant role in affecting the flow of investment capital in general, in contrast to the rational economic behavior characterized by fund return and risk performance.

Purpose: The purpose of this thesis is to develop an understanding for how risk, return and ethicalaspects affect the decision to invest in an ethical fund. Specifically is the aim of the thesis todevelop a perception if socio-demographical differences regarding gender, age and education canexplain the propensity to invest in ethical funds. Method: A survey consisting of 90 respondents. Conclusion: The thesis finding show support for the claim that women see the ethical aspect inrelation to the return for investment in an ethical fund as more important than men do. This canfurther explain the propensity for women to invest more in ethical funds than men. The thesisdoesn’t find any support for the claim that women and men, younger and older value low risk, forthe decision to invest in an ethical fund, differently. This goes against previous research within thefield of mutual fund and indicates that the investment behavior between ethical funds and regularfunds differ. The thesis did not find any support for the claim that higher educated people see theethical aspect in relation to the return as more important than people with lower education. / Syfte: Studien syfte är att utveckla en förståelse för hur risk, avkastning och etiskt inslag påverkarvid beslutet som leder till investering i en etisk fond. Specifikt syftar uppsatsen till att utvecklauppfattning kring om socio-demografiska skillnader avseende kön, ålder och utbildning, finns somförklaring i benägenheten att investera i etiska fonder. Metod: Vi har gjort enkätundersökningar på 90 respondenter Slutsats: Uppsatsen finner stöd för att kvinnor ser den etiska aspekten i relation till avkastningenvid investering i en etisk fond som viktigare än vad män gör. Detta kan förklara varför kvinnorockså är mer benägna än män att investera i en etisk fond. Uppsatsen finner inget stöd för attkvinnor och män, yngre och äldre värderar låg risk vid investering i en etisk fond olika. Dettamotsäger tidigare forskning inom investeringsbeteende för fonder generellt sett vilket indikerar attinvesteringsbeteende för vanliga fonder och etiska fonder skiljer sig åt. Uppsatsen finner helleringet stöd för att högre utbildade ser den etiska aspekten som viktigare än avkastning vidinvestering i en etisk fond.

How can you use your money to make the world a better place? This research explores how institutional shareholders can use their position of ownership to influence corporations with regards to issues such as human rights, labour conditions, and the environment (otherwise known as CSR). This work, comprised of six separate studies, shows that translation processes, which can bridge the disparate institutional logics of the corporate sector with the logics of the environmental protection and social justice sectors, enables shareholders influence on CSR. This research also introduces the notion that shareholders can act in a capacity of norm entrepreneur and norm promoter, suggesting that shareholders can influence corporations in more far-reaching ways than changing single instances of behaviour. / <p>Diss. Stockholm : Handelshögskolan, 2009 Sammanfattning jämte 6 uppsatser</p>

This study addresses the green bond market, a young and upcoming market that has received increasing attention in recent years. Academic literature in the field is limited, therefore theaim of this study is to identify investors’ main barriers and motives behind green bondinvestments. In order to examine Swedish fund companies’ requirements to invest in greenbonds, questionnaire responses were linked to interviews. The overall result shows the importance of financial incentives in investment decisions. In terms of market barriers, the low return of green bonds was the main reason that investments were restrained. It has been stated that green bonds are issued at a premium due to an additional reporting related administrative cost for the issuers. Another defined limit was the concern for issuers not fulfilling their 'green' obligation. The main motive behind green bond investments was to invest in a sustainable environment followed by the possibility to gain a combined financial and environmental return. In addition to the financial attributes, investors find a utility function in the green bonds that account for the premium price that these investors seem to accept. Furthermore, social norms are shown to influence the investment decision to a lesser extent.

In today’s society sustainability has become a highly discussed topic due to the increase in global average temperatures and changing ecosystems. Despite differentiating views regarding the origins of these changes, a proportion of the society have begun to adjust themselves into having more green profiles. This has led to an uprising among the number of investors who focus on making socially and responsible investments. However, on the contrary, there is still a substantial proportion of investors who do not invest in environmentally, animal and human friendly products. Which in turn may negate the pace of the ethical and sustainable development of our society. This issue leads to this study’s research question: What are the reasons or hindrances as to why students at Umeå School of Business and Economics do not invest in SRI financial products?   The main purpose of this paper is to explore why individuals at Umeå School of Business and Economics do not invest in SRI financial products. Furthermore, the paper aim to have an extra emphasis on information. In addition to the main purpose, the thesis will investigate if any links exist between investing ethically/sustainable and one’s daily behaviour. In order to explore these purposes, the authors uses past research within this area together with theoretical concepts regarding “Investment Decisions”, “Markowitz Portfolio Optimisation Model” and “Pro-Social Behaviour”. To conduct this study, the paper uses a quantitative approach with both primary and secondary data. The primary data is collected through a survey sent out to 917 students at Umeå School of Business and Economics. In order to achieve the purposes of this study, the data from non-SRI investors was used to analyse their investment behaviours.   The results of this study indicate that the majority of non-SRI investors are men. Furthermore, the findings illustrate that the expected financial return of SRI and risk when investing is significantly related to the probability of not investing in SRI. Additionally, the results point at that the demeanour of not investing in SRI products are significantly due to a lower level of knowledge concerning financial return of SRI. In conclusion, the authors argue that the attraction of capital ethical and sustainable investments can be greatly increased by educating investors in SRI products. Consequently, the increase in awareness and attraction of capital can aid solving the ethical and sustainable issues that exists today.

Corporate Social Responsibility (CSR) is a much debated and ever changing topic. From a South African context, one of the most recent means of measuring CSR has been through the use of the Johannesburg Stock Exchange (JSE) socially responsible investment index (SRII). The JSE SRII was first introduced in 2004 and has grown in popularity and effectiveness since. Included amongst the criteria for inclusion in this index is compliance with black economic empowerment (BEE). The index measures companies against the triple bottom line (environment, society&economy). Companies included in the index are deemed to have good CSR practices. This study evaluates the effects of CSR on the corporate financial performance (CFP) of the top 100 listed companies on the JSE over a 10 year period (2002-2011). The findings of the study suggest that companies not included in the SRII, on average, perform better than SRII companies. The basis of this conclusion is on the analysis of the results of the total return index (TRI), return on assets ratio (ROA) and the net profit margin percentage (NPM). / Dissertation (MCom)--University of Pretoria, 2013. / Financial Management / unrestricted

This research study examines the risk-adjusted performance and portfolio risk of 60 large cap equity funds - mutual funds - under Swedish management. These funds apply environmental, social and governance criteria in their investment strategies. The empirical context concerns the COVID-19 situation and the context is divided into three periods, before, during and after the COVID-19 crisis. The ESG concept, modern portfolio and stakeholder theories are used to develop a theoretical base for the study on which the hypotheses are based which are summarized in a conceptual model. Secondary data regarding ESG and risk-adjusted returns are collected for each fund based on which the sharpe ratios and standard deviations (total or portfolio risk) for each fund are calculated. While there are associations between ESG and portfolio risk, no associations are found between ESG and sharpe ratios. As a result, this confirms the fact that ESG could be characterized as a mechanism to protect against downside risk in poor economic times but no association was established that ESG could also be used as a mechanism to determine efficiency in terms of risk-adjusted performance

This dissertation contains three essays on the non-pecuniary preferences pertaining to financial asset characteristics and their implications for asset pricing. The first essay considers the pricing implications of screens adopted by socially responsible investors. A model including such investors reconciles the empirically observed risk-adjusted sin-stock abnormal return with a systematic “boycott risk premium” which has a substantial financial impact that is, however, not limited to the targeted firms. The boycott effect cannot be displaced by litigation risk, a neglect effect, and liquidity considerations, or by industry momentum and concentration. The boycott risk factor is valuable in explaining cross-sectional differences in mean returns across industries and its premium varies directly with the relative wealth of socially responsible investors and with the business cycle. The second essay generalizes Fama (1996)’s concept of Multi-Factor Efficiency without being limited by additional random state variables that must affect future investment opportunities. Incorporating non-pecuniary preferences into a representative investor’s utility function generates multi-factor pricing implications. A representative investor chooses among expected returns, variances, and levels of characteristics according to their taste, which gives rise to an N-fund separation theorem with static characteristics. If a portfolio is built to maximize the exposure to the asset characteristics, the covariance between asset returns and this portfolio returns will be identical to the underlying characteristics. Such identity makes obsolete any attempts to distinguish between characteristics and risk exposures as the driving forces behind the cross-sectional variation in stock returns. The third essay develops a procedure for deriving systematic factors from characteristics, based on maximizing each factor’s exposure to a characteristic subject to a given level of factor variance. The resulting characteristic-mimicking portfolios (CMP) price mean asset returns identically as the original characteristics, irrespective of the underlying model. Accordingly, differences in the performance of mimicking factors and characteristics in explaining mean returns should be interpreted as an artifact of arbitrary procedural choices for generating mimicking factors. Factors and characteristics may be distinguished usefully only by determining if CMPs have significant explanatory power for the time series of returns. / Thesis / Doctor of Philosophy (PhD)

<p>Several organisations have called for clarifications on sustainable investment. The aim of this study is to map and compare the ethical criteria used by Socially Responsible Investment (SRI) funds in their assessment of companies. My attention is also to seek for clarifications on the definition on SRI. A theoretical framework has been used to identify core issues of socially responsible investment. The areas of interest are charitable giving, environmental technologies, negative and positive screening and shareholder activism. The empirical material consisted of qualitative interviews with 4 fund managers from 5 investment management firms in addition to written documents on the funds’ ethical criteria. The conclusions are that all of the funds use negative criteria in their assessment of companies, with similarities in what may be considered as unethical activity and differences in the extent. Most of the funds also seek to identify better-managed companies through an assessment of how companies comply with international agreements. Differences occur in the choices of international agreements as well as the minimum criteria for investing. Most of the investment management firms engage in shareholder activism with the aim to influence the companies’ corporate behaviour, thus with different levels of engagement. Some have dialogue with whom they invest in, some favour the idea of communicate with companies they do not invest in as well. Furthermore, the results of this study show that investments in environmental technologies are rare since these companies are too small. When it comes to charitable giving, donations to charity may be seen as SRI or may not be seen as SRI depending on if the concept refers to investment criteria.</p>