Corporate Social Responsibility (CSR) is a new topic in finance which can be viewed from two different perspectives: that of the business (CSR), and that of the individual investor (Socially Responsible Investing, SRI). The evidence from this study suggested that in the short-term, there were no significant price effects on the SRI stocks around the announcement dates of the SRI constituent lists. In contrast, the returns of SRI portfolios over the sample period seemed to be superior to those of conventional firms. The regression analysis found that generally the SRI coefficients were insignificant; however using one of the models during the fifteen year period, it was found that SRI constituents attained a ROE that was 11.18% higher than conventional peers as well as a ROA that was 1.824% lower than conventional firms. When the period was restricted to 2004-2009 it was found that social performance was positively (and sometimes significantly) correlated with ROE.

Kenya has over the last few years witnessed tremendous growth as an emerging market with the GDP growing at 5% and the capital markets having a year on year growth of 19%. Despite the growth and sophistication of the financial markets, a host of hurdles have kept Kenya off the mainstream Responsible Investing agenda. This has resulted in no Socially Responsible Investment (SRI) fund assets and none of the market players being signatories to the United Nations Principles for Responsible Investing (PRI). One of the building blocks to this journey could be introducing a Sustainability Index for listed companies on the Nairobi Securities Exchange (NSE). This would form a basis for integrating Environmental, Social and Governance (ESG) aspects into the private sector and other proponents of the society, including the public sector. This research is thus aimed at linking the growing sophistication of the financial markets in Kenya with the possible creation of a Sustainability Index. In this sense, financial markets are seen to have the power to affect social, economic, and environmental outcomes in which a Sustainability Index could become a good tool in measuring such outcomes. The study adopted a qualitative research design which was used to obtain information based on the key research questions of the study. The research findings suggest that Responsible Investing (RI) is understood within the realm of business ethics and corporate governance. RI is inferred to as a manner of doing business that goes beyond short term financial returns and also takes into account the needs of other stakeholders. ESG aspects identified from the study provide for the requisite issues out of which a Sustainability Index can be developed for measuring the impact of Responsible Investing. Within the framework of a Sustainability Index, it is clear that companies will be made more accountable; redefine their corporate boundaries and through shared value, measure the social and environmental impact of their business model. However, there is still need for increased awareness on RI, stakeholder activism and an improved regulatory framework. Embedding Responsible Investing in Kenya will entail understanding the system of actors, so as to look at opportunities of Creating Shared Value whilst setting this up in the right disclosure model.

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Approximately $25.2 trillion in total assets under management in the United States is involved in some strategy of socially responsible and sustainable investing. Grounded in the stakeholder theory, the purpose of this correlational study was to examine the relationships between financial performance, firm size, leverage, and corporate social responsibility. A random sample included 119 large companies located in the United States from the population of companies listed in the Russell 100 index. The data were collected via Bloomberg Terminal. Multiple linear regression analysis was used to predict Environmental, Social, and Governance (ESG) activity scores. The 3 predictor variables accounted for approximately 7% of the variance in ESG activity scores and the result was statistically significant, F(3,115) = 2.83, p < .04, R2 = .07. Although the p value was significant, the R2 was low representing a poor model fit. In the final analysis, total revenue was added to the model and was a significant predictor and negatively correlated with ESG activity scores; However, return on equity and leverage were not significant predictors of ESG activity scores suggesting the potential need to transfer some corporate social initiatives from business leaders to government policy makers. Future researchers should consider incorporating additional variables to make the model more useful. The implications for positive social change include the potential to identify fiscal incentives for corporate social programs by policy makers which benefit stakeholders such as employees, suppliers, customers, communities, and the environment.

This research sought to find local evidence within the Israeli context that corporate social responsibility can have positive impact on corporate financial performance, similar to research findings in leading western economies. Such local based evidence, if found, would encourage the inclusion of CSR as part of strategic management of companies in Israel. The investigation focused on a sample of leading companies in Israel, forming part of the TA-100 stock exchange index, and was undertaken between 2005 and 2006. The research used quantitative investigation of secondary data on financial performance that is available for companies traded on the stock exchange. It included social responsibility ranking undertaken by the association of 'Business for social responsibility in Israel' – MAALA. This data was used to compare financial performance between groups of companies with different levels of social responsibility. The research found that higher social responsibility for companies in Israel was associated with higher financial performance, in comparison to their counterpart companies ranked as lower in social responsibility. However at the extreme, a very high level of social responsibility is associated with decline in financial performance. The research conclusion was that companies in Israel face the same CSR-to-CFP relationship, as their counterparts in leading western economies. This provides the rationale for Israeli companies to incorporate social responsibility as part of their business strategy aimed at improving financial performance.

Green bonds are a type of bonds that are designated for investment projects that have a positive effect on the environment. Such projects could be preventing climate change by reducing emissions of greenhouse gases, increasing energy-efficiency, or improving waste management. Green bonds have risen considerably in issued volume in recent years. Sweden has been one of the forerunners in this development and the interest towards these products seems to be high among individual Swedish investors. Initially, investors in green bonds have been mainly financial institutions, but there are an increasing number of mutual funds, which are aimed for retail banking customers as well. Previous research in socially responsible investing has not paid attention to green bonds from the perspective of the private, individual investor. This study is aimed to study potential individual green bond investors in Sweden. The purpose of this study was to answer the research question of who the typical Swedish green bond investors are, based on demographic characters. As research sub-questions, the thesis also answered questions regarding perceived risk and return on green bonds, and the effect of environmental attitude and behaviour on potential green bond investments. The study was carried out as an Internet survey by means of a questionnaire directed to Swedish investors. In total, 66 respondents answered the survey, which was analysed by bivariate and multivariate methods. Among the demographic factors, two were found statistically significant, age, and parenthood. In this sample younger investors (age less than 39), were found to prefer investing in green bonds, compared to older investors. Secondly, the fact of being a non-parent turned out to be a distinctive feature of current and potential investors in green bonds. The results regarding the first research sub-question, showed that the individual investors do not perceive green bonds to be more or less risky or give more or less return than comparable conventional bonds. The second research sub-question regarding environmental attitude and behaviour, showed a significant difference between those who showed a strong pro-environmental behaviour, as opposed to those who showed a weaker pro-environmental behaviour. The conclusion about the influence of environmental attitudes was that it did not have an effect on potential green bond investments.

Purpose – The purpose of this research is to develop and contribute with an improved understanding of socially responsible investing and its barriers within the asset management sector. To accomplish the purpose of this research, four areas have been investigated; sustainability, business models, socially responsible investing, and barriers for socially responsible investing. Method – Since the research aimed to use the existing theory, and at the same time explore and gain understanding within the area of sustainable, or responsible, investments, the research approach had iterative characteristics with theoretical and empirical findings. Therefore, an abductive research approach was chosen. For the gathering of data, a multiple case study was conducted by interviewing people working within asset management companies. For the analysis of the data, constant comparison, multilevel interviews, and thematic analysis were used. Results – First, the results indicate that socially responsible investments have greatly affected the business models for asset management companies, and responsible investments are starting to become more of a hygiene factor than a way of differentiation. Second, the most significant barrier for the increase of responsible investments is preconceptions and lack of knowledge. This barrier is rooted in an underlying issue, that is lack of transparency regarding asset management companies’ investments. Furthermore, the findings indicate that government actions within the market invested in, was not such a grand barrier as presented in the literature. Theoretical contributions – The main theoretical contribution with this research is the identification of the barrier preconceptions and lack of knowledge, as this is not highlighted in the literature, but among the asset management companies it was highly significant. By analyzing the findings with an institutional theory lens, it is an understandable behavior as there are no incentives for change, hence the managerial contributions consist of regulations.  Managerial contributions – The practical contributions with this report is the need for reformed regulations in the industry where asset management companies are operating, in order to increase transparency. By seeing the issue through the lens of institutional theory, it is unlikely for self-regulations to happen as the incentives are not great enough. For self-regulation to happen, the agency costs need to surpass the costs for increased responsible investments, as it would generate enough incentives for a change to happen.

Environmental, Social and Governance (ESG) issues are becoming more and more significant for comprehensive evaluation of companies responsible investing activities. Over the years, the growth in corporate responsibility to the society and policies towards environmental consciousness has necessitated the need for comprehensive ESG integration into investment decision-making process and the impact of such activities on company‟s financial performance. Although, studies suggest that there is an increasing trend in ESG considerations among large-cap companies and public investors, little have been written about the link with private investors. Venture capital and private equity investors have an important role in shaping current innovative companies to become future leaders in the market and therefore posses the ability to influence entrepreneurs towards sustainability by incorporating ESG issues in their investment selection processes. This study sought to find out if venture capital and private equity investors consider ESG issues in their activities and if so, do cultural and institutional contexts in which they operate have any effect on their considerations? We have used two of the most advanced venture capital and private equity industries in the world – USA and UK to analysed the response of this sector to ESG issues. Essential ESG factors have been coded using content analysis method for 122 companies from both countries relating to how they practise and integrate environmental, social and corporate governance issues into their investment decision process. Statistical multivariate analysis was conducted with SPSS to analyse data gathered. Our findings revealed that in general venture capital and private equity investors are responding to calls for ESG considerations in their activities, with almost all studied companies reporting some form of ESG issues on their corporate website. However, majority of them are just at the initial stage of mentioning with little information on how it is been used as part of investment selection criteria. Results of the study also show that, investors in environmental related products and services (Cleantech) have higher levels of ESG considerations than other investors. An indication that investor‟s who finance innovative companies that provide solutions to current environmental problems do impact more positively on society. In addition, findings also confirmed earlier studies that differences in cultural and institutional contexts between countries do affect behaviour and values of companies. Thus, a country with strong regulations and incentives towards sustainability will impact on corporate culture that will increase ESG considerations among venture capital and private equity investors. Therefore, our study concluded that there is an appreciable levels of ESG consideration among venture capital and private equity investor‟s, however investors need to increase their considerations by committing more resources to environmental solutions and social issues such as clean technologies and community philanthropy.

To add to the tools currently available to combat income inequality in the United States an investment fund type is proposed, justified, described, and created using historical asset returns from 1960 to 2015. By focusing on two socio-economic indicators of poverty, inflation and unemployment rates, this fund, when marketed to investors who live near, at, or below the poverty line, seeks to increase returns during times of increased strain on the economies of the poor. Multiple hurdles are proposed and affirmatively answered to this end and a fund type and corresponding four factor model that realized hypothetical excess returns fitting the requirements of a successful investment strategy was developed and evaluated. With the increasing importance of socially responsible investment practices an investment bank who maintains a fund of this type could potentially see financial and reputational benefits.

Over the past decade, sustainability has emerged as one of the foremost issues faced by corporations across all sectors and Corporate Social Responsibility has gained much momentum in the past two decades. This research investigated whether investors in emerging markets are equally concerned about a firm’s social and environmental impacts as their counterparts in developed economies. The aim was to ascertain whether or not a correlation exists between CSR and stock market performance of South African listed companies. This was the first study undertaken in South Africa that specifically investigated the relative performances of SRI listed and non-SRI listed companies. The findings reveal that there are observable differences between the average market returns of the FTSE/JSE Socially Responsible Investment Index and the FTSE/JSE All Share Index, as well as the average price/earnings ratios and average price/book value ratios of all companies listed the JSE Main Board. Although two out of the three hypotheses failed to yield significant statistical outcomes, all the findings were in favour of the SRI. The research has opened up the avenue for future studies to investigate the purported links between sustainability and financial performance in the context of emerging markets. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted