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1 – 10 of over 1000
Article
Publication date: 23 August 2013

Saeed BinMahfouz and M. Kabir Hassan

There is a great deal of research that has been done to investigate the investment characteristics of conventional socially responsible investment portfolios compared to their…

4510

Abstract

Purpose

There is a great deal of research that has been done to investigate the investment characteristics of conventional socially responsible investment portfolios compared to their broader conventional counterparts. However, the impact of incorporating sustainability criteria into the traditional Sharia screening process has not so far been investigated. Therefore, the study aims to give empirical evidence as to whether or not incorporating sustainability socially responsible criteria in the traditional Sharia screening process has a significant impact on the investment characteristics of the Islamic investment portfolio.

Design/methodology/approach

The paper examines the investment characteristics of four groups of investment portfolios mainly, Dow Jones Global Index, Dow Jones Sustainability World Index, Dow Jones Islamic Market World Index and Dow Jones Islamic Market Sustainability Index. To improve the robustness of the study, the analysis was carried out at different levels. First, absolute mean return and t‐test were used to examine whether the difference between the different groups of investments is statistically significant or not. Second, risk adjusted equilibrium models, both single‐index and Fama and French multi‐index, were employed. This is to control for different risk exposure and investment style bias associated with different investment portfolios examined.

Findings

The paper finds that neither the Sharia nor the sustainability screening process seems to have an adverse impact on the performance and systematic risk of the investment portfolios compared to their unrestricted conventional counterparts. Therefore, Muslim as well as socially responsible investors can choose investments that are consistent with their value systems and beliefs without being forced to sacrifice performance or expose to higher systematic risk.

Originality/value

The study contributes to the existing literature by giving new evidence on the impact of incorporating sustainability criteria into the traditional Sharia screening process that has not so far been investigated.

Article
Publication date: 16 August 2021

Imlak Shaikh

In recent times, sustainable investment gaining much attention within the investors’ community and it is broadly driven by environmental, social and governance (ESG) factors. This…

Abstract

Purpose

In recent times, sustainable investment gaining much attention within the investors’ community and it is broadly driven by environmental, social and governance (ESG) factors. This study aims to examine the ESG-based sustainability index and economic policy uncertainty (EPU).

Design/methodology/approach

Corporate sustainability assessment procedure yields Dow Jones sustainability indexes (DJSIUS) and ESG compliant firms become a member of such indexes. To uncover the effects of policy uncertainty as follows: the study considers EPU index, equity market policy uncertainty index, economic and political events for the period 2000–2017. The authors present the study using a conditional volatility framework.

Findings

The correlation between the DJSIUS and policy uncertainty appears to be negative and statistically significant. It is apparent from the results that policy uncertainty does contain important ESG factors that explain the sustainable investment in US firms. Moreover, the stock market boom, credit crunch, Lehman collapse and fiscal crises have shown significant adverse effects on the sustainability index. More importantly, it is seen that investors’ sustainable investing considers presidential election years for portfolio planning; the uncertainty associated with the election years has also shown a negative impact on the sustainable returns.

Practical implications

First, sustainability is essential for the long-term stakeholders’ wealth maximization under governments’ policy uncertainty such as constrained resources, demographic and climate-change-policy, societal expectations, public-policies, regulatory structure. Second, EPU creates new opportunities and risks for sustainable firms and sustainable investing.

Originality/value

The study is novel in which the authors present the effects of uncertainty on socially responsible investing.

Article
Publication date: 6 June 2022

Bashar Yaser Almansour, Muneer M. Alshater, Hazem Marashdeh, Mohamed Dhiaf and Osama F. Atayah

The purpose of this study is to investigate the dynamic return volatility connectedness among S&P, Dow Jones (DJ) sustainability indices and their conventional counterparts.

Abstract

Purpose

The purpose of this study is to investigate the dynamic return volatility connectedness among S&P, Dow Jones (DJ) sustainability indices and their conventional counterparts.

Design/methodology/approach

This study uses time-series daily data for 10 S&P and DJ indices over the period of December 1, 2012 to December 8, 2021. The authors divide the data into three periods; over the whole sample, pre and during the Covid-19 pandemic. The study adopts the connectedness approach developed by Diebold and Yilmaz (2014).

Findings

The results reveal a high degree of connectedness between S&P and DJ indices and their relative sustainability indices over the whole sample, pre and during the Covid-19 pandemic, indicating that the sustainability indices converge toward their conventional peers. The results further show that the conventional S&P500, S&P Euro 50 and DJWI are the main transmitters of shocks, whereas the S&P400, S&P500 and S&P50 sustainability indices are the main receivers of shocks.

Originality/value

The study provides novel insights in terms of shock transmission of S&P and DJ sustainability indices and their conventional counterparts, where there is a lack of investigation of the connectedness between indices in this field.

Practical implications

The study has significant implications for investors and portfolio managers to devise portfolio strategies to minimize risk and trace the cause, the direction and the magnitude of risk transmission among different indices. Also, the results help policymakers to manage diverse types of risks associated with S&P and DJ indices. Finally, faith-based and ethical investors would be able to predict the pairwise spillover connectedness between these indices.

Details

Competitiveness Review: An International Business Journal , vol. 33 no. 1
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 20 December 2022

Efe Caglar Cagli, Dilvin Taşkin and Pınar Evrim Mandaci

This paper aims to investigate the relationship between sustainable investments and a series of uncertainties from January 2014 to December 2021, including many economic and…

Abstract

Purpose

This paper aims to investigate the relationship between sustainable investments and a series of uncertainties from January 2014 to December 2021, including many economic and political turbulences and the COVID-19 pandemic.

Design/methodology/approach

The authors use Rényi’s transfer entropy method, a nonparametric flexible tool that considers both the center distribution and lower quantiles, capturing extreme rare events that give additional insights to analysis.

Findings

The authors’ results indicate significant bidirectional information transmissions between the crude oil volatility and sustainability indices. The authors report information flows between the cryptocurrency uncertainty and sustainability indices considering tail events. The results are essential for market participants making decisions during turbulent times.

Originality/value

This paper is carried out for a variety of uncertainty measures and environmental, social and governance (ESG) portfolios of both developed and developing markets. It adds to literature in terms of methodology used. Rényi’s transfer entropy methodology is first used to measure the relationship between uncertainties and ESG investments.

Details

Qualitative Research in Financial Markets, vol. 15 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

Book part
Publication date: 24 June 2017

Adrian Zicari

The chapter describes the recent history of Sustainability Indices in three Latin American countries: Brazil, Mexico, and Chile. In these countries, local Stock Exchanges have…

Abstract

The chapter describes the recent history of Sustainability Indices in three Latin American countries: Brazil, Mexico, and Chile. In these countries, local Stock Exchanges have been recently launching their own Sustainability Indices. This ongoing trend may indicate a particular way of addressing Socially Responsible Investment (SRI) in the region. The chapter relies on secondary data, mainly documents published by the Stock Exchanges themselves, and on some selected academic and practitioner oriented articles. All three countries present some common features. In all cases, local stock markets launched Sustainability Indices, and their composition has been publicly available from the beginning. Consequently, SRI is now developing in the region in a different way from that of developed markets. The chapter is based on secondary data only. Further research may involve interviews and surveys with different stakeholders (i.e., investors, quoted companies, public officials). The illustration of a different way of developing an SRI market may help public officials and investors from other countries, either in Latin America or elsewhere, who intend to promote SRI. There are few studies on SRI in Latin America, and comparative research between different countries in the region is still rare.

Details

Corporate Social Responsibility and Corporate Governance
Type: Book
ISBN: 978-1-78714-411-8

Keywords

Article
Publication date: 15 May 2023

Yi-Chun Kuo, Yueh-Hsia Huang, Lan Sun, Garrick Small and Shih-Jung Lin

Financial institutions have a role in harmonising economic purposes with environmental and social purposes through transmission mechanisms whereby the institutions provide…

Abstract

Purpose

Financial institutions have a role in harmonising economic purposes with environmental and social purposes through transmission mechanisms whereby the institutions provide channels to promote socially and environmental desirable activities. This study explores the sustainability criteria disclosed at firm-level corporate social responsibility reports for the purpose of providing direction for financial institutions committed to enhancing the contribution to sustainability objectives.

Design/methodology/approach

The Delphi Method and the Decision-Making Trial and Evaluation Laboratory (DEMATEL) system have been employed to systematically analyse the opinions of 15 experts regarding the operation of the 7 Taiwanese financial institutions listed on the Dow Jones Sustainability Index in 2019 with respect to the capacity to affect sustainability objectives.

Findings

The findings reveal a high prominence level for corporate governance, law compliance, risk management and occupational safety and health, representing amongst the sustainability criteria considered. This suggests that financial institutions may benefit from focussing resources on these areas, starting with corporate governance, when considering means for enhancing the sustainability performance.

Research limitations/implications

The study is limited by the small number of financial institutions available in Taiwan which suggests that further research could be directed towards a larger sample of financial institutions, say by international comparison, expanding the range of industries studied or the inclusion for additional sustainability indicators.

Practical implications

Overall, the study has shed light on Taiwan's financial institutions' capacity to contribute to sustainable practices which is an area that has not been extensively investigated. This study may have useful implications for financial institutions in Taiwan.

Social implications

The authors also recognise other factors that are likely to contribute to social impacts. These include human capacity building and development, information security, green procurement, green building and climate-related financial products.

Originality/value

This study fills the gap by providing useful insights for a better understanding of sustainable development in financial institutions by promoting sustainability practice in general. The authors' analysis will assist decision-makers in identifying and prioritising the driving factors and thus adopting suitable strategies to strengthen sustainability performance.

Details

Asian Review of Accounting, vol. 31 no. 5
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 3 August 2015

Minna Yu and Ronald Zhao

This paper aims to examine whether capital market rewards firms with good corporate sustainability practices in an international setting by using the Dow Jones Sustainability Index

4358

Abstract

Purpose

This paper aims to examine whether capital market rewards firms with good corporate sustainability practices in an international setting by using the Dow Jones Sustainability Index (DJSI hereafter) as an integrated measure of firm sustainability performance.

Design/methodology/approach

There are two alternative theories regarding the impact of sustainability on firm value. The value-creating theory predicts that integration of environmental and social responsibility into corporate strategies and practices reduces firm risk and promotes long-term value creation. The value-destroying theory on sustainability suggests that managers may engage in socially responsible activities at the expense of shareholders. To perform empirical tests, we use a large international sample for a period of 13 years between 1999 (the first year when DJSI became available) and 2011. To control for self-selection bias and simultaneity, the authors use lagged values of sustainability performance in a robustness check.

Findings

The authors find a positive relation between sustainability performance and firm value, after controlling for variables that have been found to affect firm value in the existing literature. The test results are consistent with the value enhancing theory (as opposed to the shareholder expense theory) regarding the role of sustainability engagement in firm valuation. Furthermore, the positive impact of sustainability engagement on firm value is primarily driven by countries with strong investor protection and with high disclosure levels.

Research limitations/implications

A positive impact of sustainability performance on firm value supports the value-creating theory and rejects the value-destroying theory. Test results also suggest a more pronounced market response to corporate sustainability in countries with stronger shareholders protection and higher requirement for financial transparency.

Practical implications

Given the growing international capital market and intensifying global competition, the valuation implications of sustainability in an international context is of practical interest to management, investors and regulators worldwide.

Originality/value

First, it is an initial attempt to test an integrated measure of the “triple-bottom-line” definition of sustainability in an international setting. Second, our paper studies the international variation in market valuation of firm sustainability performance in terms of the value enhancing versus shareholder expense theories on sustainability. The authors explore the relevance of sustainability performance in relation to the investor protection and the reporting environment across countries.

Details

International Journal of Accounting and Information Management, vol. 23 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 13 April 2015

Mustafa Dah, Monzurul Hoque and Song Wang

The purpose of this paper is to examine the impact of Shariah guidelines on the performance of the Dow Jones Islamic Index (DJIM-US). Shariah or Islamic law is a set of rules that…

1127

Abstract

Purpose

The purpose of this paper is to examine the impact of Shariah guidelines on the performance of the Dow Jones Islamic Index (DJIM-US). Shariah or Islamic law is a set of rules that determines Islamic allowed activities including socially and ethically acceptable investments.

Design/methodology/approach

The authors apply four risk-adjusted methodologies and co-integration analysis to investigate whether limited asset universe Shariah investments limit investment opportunities and impose an opportunity cost on investors given the prediction of conventional portfolio theories.

Findings

In contrast to the prediction of conventional portfolio theories, the findings suggest no apparent opportunity cost for Shariah compatible investments. In particular, Dow Jones Islamic Mutual Funds do not under-perform the broader market US benchmarks nor do they have any co-integration with the broader indexes. Moreover, the authors find similar evidence in the studies of Islamic mutual funds in Saudi Arabia, Malaysia and Kuwait.

Research limitations/implications

The findings will be reinforced when the authors will look into long run performance of Shariah compliant funds in future. Using non-linear approach will add further clarity to the findings.

Practical implications

The results provide an insight suggesting that successful mutual fund managers are able to overcome Shariah restrictions and constraints through creative investment strategies. In the data set, the Amana Trust Growth fund and the Amana Trust Income fund were always the best performers with a highly significant abnormal return, no matter what the methodology was.

Social implications

The performance of Islamic funds during the approximately seven-year period covered by the study is very promising. Popularity of Islamic Investment is expected to grow as Muslim population represents about 25 percent of the world population and the possibility for the Muslim funds to be considered as viable alternative by non-Shariah abiding or non-Muslim investors. The empirical results in the paper provide evidence that lack in diversification did not constrain the performance of Islamic funds.

Originality/value

This paper applied comprehensive risk-adjusted methodologies and co-integration analysis to Islamic Funds for a seven-year period for multiple countries. The findings confirm previously obtained results and highlight the fact that constrained Islamic Funds may not under-perform as per conventional portfolio theories.

Details

Managerial Finance, vol. 41 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 July 2005

Joan Enric Ricart, Miguel Ángel Rodríguez and Pablo Sánchez

Although an extensive body of research treats the fields of corporate governance and sustainable development separately, less attention has been paid to the interaction between

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Abstract

Purpose

Although an extensive body of research treats the fields of corporate governance and sustainable development separately, less attention has been paid to the interaction between both fields. This paper attempts to bridge this gap by examining how corporate governance systems are evolving in order to integrate sustainable development thinking into them.

Design/methodology/approach

Drawing from corporate governance, sustainable development, and stakeholder theory literature, an analysis is performed of the governance systems of the 18 corporations that are leading the market sectors considered by the Dow Jones Sustainability World Index.

Findings

The results of our in‐depth analysis of the 18 cases are presented and the sustainable corporate governance model that emerges from that analysis is proposed.

Research limitations/implications

This model does not attempt to question or replace the previous recommendation and frameworks suggested in the literature on corporate governance and codes of governance. On the contrary, the model should be viewed as a way of integrating sustainable development/corporate responsibility into the fabric of already existing governance models suggested elsewhere.

Originality/value

The suggested model seems to be a good framework both for managers and for researchers because it can be used to improve the firm's governance systems as well as a guide for future research on sustainable corporate governance.

Details

Corporate Governance: The international journal of business in society, vol. 5 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 26 May 2023

Neha Seth and Deepti Singh

This paper aims to provide a bibliometric review and visualisation analysis of the literature on Sustainable Stock Indices (SSI) between January 2001 and March 2022. The purpose…

Abstract

Purpose

This paper aims to provide a bibliometric review and visualisation analysis of the literature on Sustainable Stock Indices (SSI) between January 2001 and March 2022. The purpose of performing this bibliometric analysis is to empirically report the trend, intellectual structure, knowledge development directions and identify prospective research topics in the area of SSI.

Design/methodology/approach

A total of 222 publications were selected after evaluating, identifying and synthesising the extensive publications using the Preferred Reporting Items for the Systematic Reviews and Meta-Analyses (PRISMA) approach. The articles were extracted from the databases of SCOPUS, Web of Science and Google Scholar. The study uses VOSviewer and RStudio software to answer four research questions.

Findings

The results signify that there has been a considerable increase in the level of research considering SSI. Further, the study shows that SSI is among the top five trending keywords in the research related to finance and environment. Most papers considered as a sample for this study are based on Dow Jones Sustainable Indices. Noteworthy, very few economies are participating in this research domain, and the significant contribution is from the developed countries.

Practical implications

The present review paper may assist the researchers in identifying the trending research topics in this domain. It may serve as a roadmap for several further studies in the area.

Originality/value

This study is unique in terms of reviewing the literature based on SSI. Further, it provides a holistic view of the current trend, global position and research hotspots of SSI, which has important implications for future research.

Details

Qualitative Research in Financial Markets, vol. 16 no. 2
Type: Research Article
ISSN: 1755-4179

Keywords

1 – 10 of over 1000