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Open Access
Article
Publication date: 4 November 2021

Raymond J. Jones and Manjula S. Salimath

Private equity and venture capital (VC) firms in the capital markets sector invest capital with the primary goal of delivering economic value. However, some firms in the capital…

Abstract

Purpose

Private equity and venture capital (VC) firms in the capital markets sector invest capital with the primary goal of delivering economic value. However, some firms in the capital markets sector have started to shift this focus to create (i.e. invest in) social value. More specifically, traditional VC firms are starting socially oriented funds, while other firms have emerged to focus solely on investments in social enterprises. These VC firms are contributing to an interesting paradox – performance metrics are not measured by profit alone but also by social innovation. From an architectural perspective, the authors examine the implications of internal design, i.e. how specific strategic and structural factors influence the financial performance of VC firms with a social orientation to determine if these firms really can “do well and do good.”

Design/methodology/approach

Social orientation was determined by content analysis of mission statements of the VC firms. Firm strategies, structures and performance were sourced from secondary data. A moderated mediation model was used to test relationships.

Findings

Results suggest that (1) socially responsible VC firms adopt distinct foci of social investing that directs their strategic orientation and (2) these various foci have vastly differing effects on the firm's overall performance, strategic decisions made and the architecture of their structural design.

Originality/value

This study is among the first to explore socially responsible VC architectural dimensions, with implications for firm design based on blended measures of success.

Details

New England Journal of Entrepreneurship, vol. 25 no. 1
Type: Research Article
ISSN: 2574-8904

Keywords

Open Access
Article
Publication date: 13 October 2017

Marianne Bradford, Julia B. Earp and Paul F. Williams

The purpose of this paper is to determine what types of sustainability activities companies are reporting and whether persons external to the companies understand how those…

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Abstract

Purpose

The purpose of this paper is to determine what types of sustainability activities companies are reporting and whether persons external to the companies understand how those reported activities correspond to the companies’ narratives about sustainability. That is to ascertain how people interpret the meaning of the activities included in the sustainability reports.

Design/methodology/approach

From a sample of sustainability reports prepared by Global Reporting Initiative (GRI) guidelines, the authors identified the distinct activities reported. The authors prepared a survey comprised of these activities and asked a sample of people knowledgeable about business and investing to evaluate each activity on the extent to which they are relevant to sustainability performance. The responses were then factor analyzed to identify the most important dimensions of sustainability these persons employed to relate the activities to sustainability.

Findings

The dimensions employed by the subjects differed in some significant ways from those dimensions used to construct the GRI format. Subjects evaluated sustainability efforts as primarily efforts of being a good citizen with sustainability an end in itself rather than as constraint to be respected in achieving profitability goals.

Research limitations/implications

The study is a first attempt so results are preliminary, i.e. suggestive but not definitive. Though preliminary an intriguing implication is that closure on a sustainability reporting structure would be premature. More effort needs to be devoted to provide more clarity on the concept of corporate sustainability and what its implications are for corporate behavior.

Practical implications

Given the results that sustainability be regarded as a corporate end, what is the role of the corporation in society seems still to be disputatious. Sustainability may not be something achievable without changes in corporate law.

Originality/value

The study is an early attempt to assess the potential alternative narratives about corporate sustainability. Its value lies in providing insights into the age-old question of what should be the role of the corporation in a free society.

Details

Journal of Capital Markets Studies, vol. 1 no. 1
Type: Research Article
ISSN: 2514-4774

Keywords

Content available
Article
Publication date: 18 August 2021

Sarah Louise Carroux, Timo Busch and Falko Paetzold

This paper aims to empirically describe the general characteristics and the investment behavior of high-net-worth individuals (HNWIs) who pursue impact investing.

Abstract

Purpose

This paper aims to empirically describe the general characteristics and the investment behavior of high-net-worth individuals (HNWIs) who pursue impact investing.

Design/methodology/approach

Data was collected from members of a global impact investor network, using an online questionnaire, a portfolio-data collection tool and semi-structured interviews.

Findings

Wealthy private impact investors are largely similar in terms of their general characteristics and investment behavior, but they diverge in their interest in specific Sustainable Development Goals (SDGs). They tend to be strongly values-driven and to adopt an investment time horizon of 7+ years for their impact investments, which they expect to yield financial returns that are no different from those of traditional investments. Interestingly, these investors perceive the well-established sustainable investing strategies of exclusion, environmental, social and governance (ESG) integration and best-in-class as not having high impact-generating potential.

Practical implications

Suggestions are provided about how wealthy private investors could use the findings to improve their impact investment decisions. Advice is offered to investment professionals on how to optimize impact investment products and services for this economically and societally highly relevant target group.

Originality/value

To the best of the authors’ knowledge, this is the first scientific study to investigate the general characteristics and investment behavior of HNWIs who pursue impact investing. HNWIs have great relevance for financial markets yet they are out of reach for most researchers. As a result, they are poorly understood, and apparently also often misunderstood, which has substantial economic and social implications that this paper helps mitigate.

Details

Qualitative Research in Financial Markets, vol. 14 no. 1
Type: Research Article
ISSN: 1755-4179

Keywords

Content available
Book part
Publication date: 29 January 2019

H. Kent Baker, Greg Filbeck and Halil Kiymaz

Abstract

Details

The Savvy Investor’s Guide to Pooled Investments
Type: Book
ISBN: 978-1-78973-213-9

Content available

Abstract

Details

Sustainability Accounting, Management and Policy Journal, vol. 14 no. 5
Type: Research Article
ISSN: 2040-8021

Open Access
Article
Publication date: 9 August 2023

Emmerson Chininga, Abdul Latif Alhassan and Bomikazi Zeka

This paper examines the effect of ESG ratings and its dimensions (environmental, social and governance) on the financial performance of JSE-listed firms included in FTSE/JSE…

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Abstract

Purpose

This paper examines the effect of ESG ratings and its dimensions (environmental, social and governance) on the financial performance of JSE-listed firms included in FTSE/JSE Responsible Investment Index.

Design/methodology/approach

The paper employs panel data covering 40 JSE-listed firms included in FTSE/JSE Responsible Investment Index between 2015 and 2019. The paper employs the two-stage least squares (2SLS) instrumental variable regression technique to estimate the effect of ESG ratings and its dimensions (environmental, social and governance) on both accounting- and market-based performance indicators.

Findings

The results of the two-stage least squares instrumental estimation analysis reveal that investment in ESG initiatives improves both accounting- and market-based indicators of financial performance. Of the ESG pillars, the paper finds environmental initiatives improves firms' financial bottom line and market performance, while a firm's social and governance practices are observed to have no effect on a firm's accounting and market performance measures.

Practical implications

The insights from this study proffers policy implications for firms' management, investors and regulatory authorities.

Originality/value

As far as the authors are concerned, this paper presents the first empirical analysis on the contribution of ESG ratings on financial performance in South Africa.

Details

Journal of Accounting in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-1168

Keywords

Open Access
Article
Publication date: 5 January 2021

Mauro Sciarelli, Silvia Cosimato, Giovanni Landi and Francesca Iandolo

Recently, socially and responsible investments (SRI) have constantly grown becoming a highly discussed issue. Therefore, the main purpose of this paper is to better understand if…

21944

Abstract

Purpose

Recently, socially and responsible investments (SRI) have constantly grown becoming a highly discussed issue. Therefore, the main purpose of this paper is to better understand if environmental social governance (ESG) criteria integration in investment strategies can support the transition of finance toward a more sustainable growth.

Design/methodology/approach

An explorative analysis based on a multiple case study has been conducted and addressed by a content analysis on the Key Investors Information Documents (KIIDs) that the sample companies published for 2020.

Findings

The achieved results demonstrated that the case companies differently integrated ESG into their SRI; thus, if some of them are quite near to a full integration, the others demonstrated less than a full commitment with ESG. This seems to be mainly due to the different approach that asset management companies (AMCs) and/or managers have adopted for integrating ESG criteria.

Research limitations/implications

Even though the achieved results offered some interesting insights for asset managers, the explorative and qualitative nature of this study and the small sample investigated somewhat limits it.

Practical implications

AMCs, consultants and managers in developing and implementing their SRI strategy could be much more focused on the importance of ESG integration for the transition toward a more responsible and sustainable finance (micro-level) as well as a more sustainable development (macro-level).

Originality/value

The paper provides new insights into the essence of SRI strategies and their potential to contribute to sustainable development. Thus, it tries to shed new lights on the role that ESG can have to stimulate and support investment decisions and, in so doing, contributing to make finance grow more sustainable.

Open Access
Article
Publication date: 21 June 2019

Halil Kiymaz

The purpose of this paper is to examine socially responsible investment (SRI) fund performance and investigate the factors influencing fund performance.

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Abstract

Purpose

The purpose of this paper is to examine socially responsible investment (SRI) fund performance and investigate the factors influencing fund performance.

Design/methodology/approach

The study uses return data from the Morningstar database for 152 SRI funds from January 1995 to May 2015. The initial analysis includes the use of various risk-adjusted performance measures, including Sharpe ratio, Treynor ratio, Information ratio, Sortino ratio and M2. The study also uses four factor models, including Jensen single-factor model, Fama–French three-factor model, Carhart four-factor model and Fama–French five-factor model to explain SRI fund returns. Finally, a cross-sectional regression analysis is applied to investigate the determinants of SRI fund returns.

Findings

The results show that, on average, the SRI funds provide comparable risk-adjusted returns relative to various benchmark market indices. Market factor is significant in explaining SRI fund returns. Examining each factor model, the results do not support Fama–French’s three-factor model as neither size nor value factor is significant. The author finds weak support for Carhart’s momentum factor along with the market factor. Finally, the Fama–French five-factor model shows market, size and operating profit factors explain SRI fund returns. The study also finds the fund performance is stronger for funds with the higher turnover ratio, the larger fund size and more managerial experience and lower for funds with higher expense ratio. Also, funds formed with negative screening perform better than positive or mixed screened funds.

Originality/value

SRI funds have received considerable attention from investors. This study contributes to the literature by examining SRI fund performance and investigating factors influencing their performance using multiple factor models and cross-sectional regression analysis. The findings are relevant for investors who demand responsible investment opportunities without sacrificing returns for nonfinancial screenings. Findings also suggest that investors should consider fund characteristics when selecting SRI funds.

Details

Journal of Capital Markets Studies, vol. 3 no. 1
Type: Research Article
ISSN: 2514-4774

Keywords

Open Access
Article
Publication date: 16 August 2019

Syed Marwan and Mohamed Aslam Haneef

The purpose of this paper is to examine the world’s first social impact bond (SIB) and the lessons that can be learned for the Islamic finance industry to fulfil its true…

2615

Abstract

Purpose

The purpose of this paper is to examine the world’s first social impact bond (SIB) and the lessons that can be learned for the Islamic finance industry to fulfil its true objectives.

Design/methodology/approach

The Peterborough SIB was recently announced to be successful in achieving its targeted social and investment outcomes, reducing recidivism by 9 per cent and paying back investors a 3 per cent pa return. The paper compares Peterborough SIB with socially responsible investment (SRI) sukuk in terms of form and substance, and finds that there are various lessons from the Peterborough SIB that can be useful for future development of Islamic financial products.

Findings

Innovative social financial tools such as SIB exemplify the true spirit of risk sharing and social responsibility, which is arguably missing in current practices of the Islamic finance industry. With the growing interest towards SRI strategies and increase in socially motivated investors, such financial tools may not only help the sustainable growth of the Islamic finance industry, but also fill in the gap between its theory and practice.

Practical implications

As such, the paper also proposes a social impact sukuk model which integrates the key aspects learned from Peterborough SIB. This includes prioritising social impact, measurable success indicators, data and management systems, flexible contracts, third sector integration, risk sharing and fostering the culture of innovation.

Originality/value

The findings can offer some practical insights in dealing with the issue of Islamic finance practice being overly concerned with its formal adherence with Islamic legal rules whilst neglecting its true fundamental values.

Details

Islamic Economic Studies, vol. 27 no. 1
Type: Research Article
ISSN: 1319-1616

Keywords

Open Access
Article
Publication date: 19 May 2023

Emmanuel Asafo-Adjei, Anokye M. Adam, Peterson Owusu Junior, Clement Lamboi Arthur and Baba Adibura Seidu

This study investigates information flow of market constituents and global indices at multi-frequencies.

Abstract

Purpose

This study investigates information flow of market constituents and global indices at multi-frequencies.

Design/methodology/approach

The study’s findings were obtained using the Improved Complete Ensemble Empirical Mode Decomposition with Adaptive Noise (I-CEEMDAN)-based cluster analysis executed for Rényi effective transfer entropy (RETE).

Findings

The authors find that significant negative information flows among sustainability equities (SEs) and conventional equities (CEs) at most multi-frequencies, which exacerbates diversification benefits. The information flows are mostly bi-directional, highlighting the importance of stock markets' constituents and their global indices in portfolio construction.

Research limitations/implications

The authors advocate that both SE and CE markets are mostly heterogeneous, revealing some levels of markets inefficiencies.

Originality/value

The empirical literature on CEs is replete with several dynamics, revealing their returns behaviour for diversification purposes, leaving very little to know about the returns behaviour of SE. Wherein, an avalanche of several initiatives on Corporate Social Responsibility (CSR) enjoin firms to operate socially responsible, but investors need to have a clear reason to remain sustainable into the foreseeable future period. Accordingly, the humble desire of investors is the formation of a well-diversified portfolio and would highly demand stocks to the extent that they form a reliable portfolio, especially, amid SEs and/or CEs.

研究目的

本研究擬審查多頻率的及為市場成份的信息流和全球指數。

研究設計/方法/理念

研究人員使用基於改良完全集合經驗模態分解自適應噪聲(Improved Complete Ensemble Empirical Mode Decomposition with Adaptive Noise)的聚類分析法,取得Rényi有效轉移熵,藉此得到研究結果。

研究結果

我們發現、於大部份多頻率,在持續性股票和傳統股票間有顯著的負信息流動,這會增加多樣化的益處。這些信息流大部份是雙向的,這強調了股票市場成份及其全球指數在構建投資組合上的重要性。

研究的局限/啟示

我們認為持續性股票市場和傳統股票市場大多為異質市場,這顯示了市場的低效率,而且這低效率的程度頗大。

研究的原創性/價值

關於傳統股票的實證性文獻裡是充滿了變革動力的,這顯示了它們以多樣化為目的的回報行為。這使我們對關於持續性股票的回報行為、認識變得實在太少了。於此,大量的企業社會責任的新措施不斷提醒各公司、要本著企業社會責任的理念去營運;但投資者需清晰明白他們為何需在可見的將來保持可持續性。因此,他們卑微的願望是一個較好的多樣化投資組合得以形成,故此他們高度要求股票要有組成可靠投資組合的性質和能力,特別是在持續性股票和/或傳統股票當中。

Details

European Journal of Management and Business Economics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2444-8451

Keywords

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