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The aim of this chapter is to propose a critical analysis of socially responsible investing (SRI) through debate and reconstruction. Our goal is therefore to try to understand how the definition of ethics in finance has steered SRI towards a financial approach where ethics is guided by finance.

This chapter proposes a two-point approach consisting of a meta-debate and development perspectives. Each approach is divided into three debates (ideological and philosophical, scientific and practical), which are interconnected.

The chapter concludes that the debate on mainstream SRI is necessary but should be re-discussed, as it is preventing in its current form the concept from developing and being grounded in real ethical values, sacrificing the individual ethics that should be driving investing decisions.

The chapter proposes to rethink the paradigm around SRI through a conceptual framework that re-inserts finance within ethics, where non-financial performance and impact investment should be at the centre of the scientific debates, leading to an SRI based on exclusion, the consideration of controversies and social impact measurement.

The anti-apartheid movement represented a cornerstone for socially responsible investors in the 1970s and 1980s driven by the willingness to promote lasting social change. What happened next in terms of socially responsible investing (SRI) in the free South Africa? This chapter explores the local development of SRI in South Africa post-apartheid.

An in-depth literature review combined with a content analysis 73 SRI funds’ investment mandates were undertaken to investigate the local development of SRI in South Africa over the period 1992–2012.

Mechanisms of local divergence and global convergence have both shaped the phenomenon of SRI in South Africa. SRI in South Africa represents a melting-pot of societal values anchored in a local developmental and transformative political vision, some local and global Islamic religious values, and worldwide SRI and CSR homogenisation trends.

This chapter is the first attempt to outline the mechanisms of local divergence and global convergence that have moulded SRI in a democratic South Africa.

Introduction: This chapter is intended to link the embracing strategy of ‘socially responsible investment’ with the apparent cause of economic destruction ‘financial crimes’. Today’s financial world is not always associated with ethics and morality, but it does not mean rising investments cause rising financial crimes. Socially responsible investing (SRI) has been rising, and many of today’s investors are interested in tracking ethically sound companies. Investors find a great way to invest around many investment opportunities, while socially responsible investors work with little social cause. This increasing literacy over SRI notably helps to reduce investments in unethical grounds which in turn reduces financial crimes.

Design/methodology: This work is premised on desk research. Conceptual and documentary methods were used in the study. The tertiary data source has been used in the study to develop a template describing the working of SRI in fixing financial crimes.

Findings: Findings of this study detail: a breakdown of industries that comes under SRI, channels of financial crimes, impact of SRI on financial crimes, and design an action plan for more effective environmental, social, and governance (ESG)-based investments to fix problems of financial crimes in the Indian economy.

Practical implications: The model of SRI has unfolded these days. While the purpose of these funds differs, they generally swear off the weapons industry and avoid ‘sin stocks’. In-depth analysis of this study area enables building quality investment strategy among investors and thereby helps to combat financial crimes.

Purpose – The purpose of this chapter is to explore the proactive role played by investor relations officers (IROs) in enhancing the quality and delivery of corporate social performance (CSP) information to social responsibility investment (SRI) analysts and investors, thereby improving the link between CSP and corporate financial performance (CFP). The increasing pressures on corporations to produce and communicate CSP information will be described, as well as how the timely and meaningful communication of CSP can improve CFP.

Methodology/approach – Subsequent to a review of relevant literature, three case examples from McDonald’s, Nestlé, and Stora Enso illustrate Hockerts and Moir’s grounded theory framework that suggest how IROs can improve communication of CSP.

Findings – This chapter illustrates three levels of communicating CSP information. First, IROs target SRI investors and respond to ESG inquiries and surveys. At the second level, IROs integrate ESG information into business strategy and financial results. At the third level, IROs actively market CSP and create a two-way proactive dialogue between SRI investors and senior management and the board.

Practical implications – This chapter provides practical examples to improve ESG activities and their communication via the IRO to SRI analysts and investors.

Originality/value of chapter – This chapter contributes to the literature on the CSP–CFP link by illustrating how proactive IROs are improving the CSP information channel to SRI securities analysts and investors. Furthermore, it advances the theory and research concerning the impact of the information channel between IROs and securities analysts behind the CSP–CFP link.

This chapter sketches a new development in responsible investing, namely impact investing. Impact investing, which we define as the entire spectrum of investments deliberately aiming to create shared value, can be seen as an integrative approach to wealth creation through investments. The case of microfinance is used to illustrate this new development.

The chapter combines a viewpoint and a case study that serves to illustrate the practical relevance of the viewpoint.

The chapter starts with a brief overview of the origin and rise of responsible investments, followed by a description of mission-related investments and impact investing as its latest development. Microfinance is presented as a special case, thereby focusing on the investors, the asset allocation and the meaning – and application – of the notion of impact.

The chapter shows that a focus on social and financial returns can be combined without having to make serious financial sacrifices. It also demonstrates that investments can come from investors as diverse as pension funds, foundations or high net-worth individuals.

If impact investing really takes off – particularly supported by institutional money – there will be much more opportunity to tackle social and environmental innovation than without those investments.

The chapter challenges (institutional) investors to evaluate their responsible investment strategy and to rethink their asset allocation. Impact investing can become an important addition to the responsible investment landscape.

This study aims to test the mean and volatility spill over from the environmental, social, and governance (ESG) market to the stock markets of G7 countries. The study used ARMA-GARCH model to predict the results. The findings of the study reveal that as the spill over exists in the markets, however the mean volatility does not exist showing efficiency of the market as significant results depict that past prices cannot predict the future prices. It provides new insights for the international portfolio investors and policymakers by shedding light on how cross-markets correlate in two different markets.

Factor investment is booming in global asset management, especially environmental, social, and governance (ESG), dividend yield, and volatility factors. In this chapter, we use data from the US securities market from 2003 to 2019 to predict dividends and volatility factors through machine learning and historical data–based methods. After that, we utilize particle swarm optimization to construct the Markowitz portfolio with limits on the number of assets and weight restrictions. The empirical results show that that the prediction ability using XGBoost is superior to the historical factor investment method. Moreover, the investment performance of our portfolio with ESG, high-yield, and low-volatility factors outperforms baseline methods, especially the S&P 500 ETF.

This chapter suggests that enhancing sustainable development in the age of technologies requires reflection about the relationship between business practice and sustainable development, as well as clarification of the relationship between sustainability and sustainable development. At the core of business activity is the definition of sustainable development defined by Brundtland (1987) as ‘meet[ing] the needs of the present without compromising the ability of future generations to meet their own needs’. Although that captures only one aspect of the sustainability story and its relationship to sustainable development, it nonetheless shapes business approach in research and in sustainability practices. To illustrate the contradictions and tensions in practice so far, this chapter uses three lenses: measurement in environmental, social and governance (ESG) investment, the problem of scalability and the challenge of bias in artificial intelligence (AI). It is not clear that we need a paradigm shift, but a shift in mindsets around sustainability business practice will be needed if sustainable development is to be enhanced in the age of technologies.

Andrew Williams and I have argued since the early 1990s that not only have equity (and subsequently most other assets classes) come to be dominated by institutional ownership of various types, an observation that many have made and documented at length, but that the majority of those institutions are fiduciary ones (primarily pension and mutual funds in the United States). More recently pension and mutual funds have been the source of the majority of funds for many ‘alternative’ investments, such as hedge funds, private equity and commodity funds. In the last two decades there have been parallel developments in other countries, although the form of the institutional investors vary widely, from fiduciary ones mostly in common law countries to fiduciary-like ones in many civil law jurisdictions (e.g. the Netherlands), to some sovereign wealth funds (e.g. Norway and Australia and some others) which do not have fiduciary obligations as such, but in their legal mandates and practices are structured much like those that are fiduciary or fiduciary like. As discussed below, all these (in addition to some other large institutional owners) are universal owners, that is, they own a representative cross section of their investment universe (which increasingly is a global universe). Given their ownership structure characterised by a large degree of diversification, universal owners' long-term interests to a large degree coincide with the economy as a whole.

German ethical banks have experienced a significant increase in customers, deposits, and lending. They aim to establish a fairer banking system. But the simultaneous pursuit of social, ecological, and economic goals leaves them vulnerable to conflicting orders of worth. The authors examine the normative foundations that ethical bank employees refer to when they describe their everyday practices and identify the specific problems that arise from negotiating between moral principles and economic demands to provide insights into the impacts, constraints, and paradoxes of normatively oriented business practices. Drawing on the theoretical framework of the sociology of critique, the authors assume that moral categories, social processes of interpretation, and justification are an essential part of markets. Ethical banking is characterized by the need to meet both market-limiting and market-expanding requirements, and this particularly becomes contentious when dealing with economic growth. By analyzing ethical banks’ freely accessible documents, the authors first outline the institutional guidelines. In a second step, the authors analyze 27 qualitative interviews with employees of ethical banks to gain insights into everyday lending practices and action-guiding normative orientations. The goal of this chapter is to examine the tensions that may arise from applying normative guidelines under the condition of increasing economic requirements and to disclose the way that ethical banks negotiate between mechanisms of expansion and limitation. The analysis of this chapter points out a paradox of ethical banking: due to the banks’ economic expansion, investments corresponding to their ethical commitments tend to become a luxury they cannot afford.