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This paper aims to analyze the portfolio characteristics and the performance measures of sustainability-themed mutual funds, compared to ethical mutual funds that implement different sustainable and responsible investment strategies.

The study refers to a European sample of 106 ethical funds and 51 sustainability-themed funds. The monthly performance of each fund is downloaded from Bloomberg for the period from January 1996 to December 2015. By applying a Fama and French (1993) three-factor model, the authors overcome the limits of a capital asset pricing model (CAPM) based-single index model, to compare the performance of the two categories of funds.

Sustainability-themed funds do not differ significantly from ethical funds in terms of portfolio attributes, except for market capitalization, age and net asset value. Regarding performance measures, the results shows that sustainability-themed funds have a lower underperformance than ethical funds (as measured by Jensen’s alpha), whereas the samples do not differ in terms of market risk (as measured by Beta coefficient). The idiosyncratic risk of sustainability-themed funds is positively influenced by the specific portfolio strategies. The sustainability-themed funds show a higher concentration in the industrial sector and a lower exposure to financial sector than ethical funds; in terms of geographical strategy, they are more global and international oriented; they mainly focus on small caps and value stocks.

The different sustainable and responsible investment strategies can be applied simultaneously and in a growing number of possible combinations. Mutual fund managers can consider thematic approach as an efficient opportunity for reconciling financial performance and economic sustainability. It is demonstrated that sustainability-themed funds adopt a portfolio strategy significantly different from ethical funds and from the environmental, social and governance benchmarks. Mutual fund managers implement a thematic specialization without any negative impact on the funds returns compared to ethical funds; actually, with a proper diversified portfolio, they are able to reduce idiosyncratic risk.

The analysis is extremely innovative, especially for the thematic sample. During the past 15 years, literature about sustainable and responsible investment has been focused especially on the differences in terms of risk and performance between socially responsible and conventional funds. This paper, starting from the methodology applied in these studies, wants to compare two different types of socially responsible strategies, with a specific focus on sustainability-themed mutual funds, given their exponential growth in the past few years.

The purpose of this paper is to demonstrate failures of self‐regulation among RI actors following the current economic crisis. It also seeks to propose specific regulations for the investment business. The paper questions whether financial capitalism can support sustainability.

The paper summarizes the crisis; defines what is at stake; critically reviews the various forms of responsible investment; describes conflicts of interest in CSR and RI; and suggests regulatory measures to correct systemic problems. It tests RI/SRI/ESG against the reality of portfolio construction, and identifies the implications of their shortcomings.

The paper finds that RI/SRI/ESG best in class portfolios are challenged for various reasons; engagement activities are challenged due to the structural inadequacies in the industry; SRI fund managers themselves do not use SR; CSR does not address strategic core business matters; conflicts of interest on the way plague the investment supply chain; and private equity may enable progress in RI.

More research is required on the theory of RI and current systemic constraints.

Specific regulatory measures to counteract systemic failures are identified here.

The scope of the critique and findings is original. Value is the real experience of a working practitioner who is sympathetic to RI/SRI/ESG.

The world of ‘responsible’ ethical and social investment is more substantial than it might seem. At the end of 2007, holdings in ‘responsible’ funds amounted to 20 billion, against the 5 billion three years earlier. Although these ‘responsible’ holdings tend to be ‘best-in-class’ funds (Fig. 9.1), the significant rise in ‘sustainable funding’ in this area is clear.

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 market for solidarity employee savings remains under most people's radar in France, but targeting a new audience of employee savers it has progressed steadily in recent years. The solidarity employee savings works on the same mechanisms of employee savings ‘classic’, while allowing employees, through a part of their investments, to help solidarity activities. Since 1 January 2010, it is mandatory that French employees be offered a solidarity savings fund in which they can invest assorted company savings plans (French acronym ‘PEE’ for plans épargne entreprise) or group retirement savings plans (French acronym ‘PERCO’ for plan épargne retraite collective). In this way, French legislators have created a wealth of around 12.3 million employees in solidarity employee savings, hence the value of understanding this emerging phenomenon and ascertaining its compatibility with employee savings.

The purpose of this study is to segment and profile socially responsible investment (SRI) funds based on investment strategies they use. Specifically, the paper investigates how different SRI strategies are applied and how they are related to fund-level characteristics, with the goal of recognising their potential dominant combinations in SRI practice.

Cluster analysis was complemented with one-way ANOVA to classify 147 SRI funds from 11 European countries into different groups based on the diversification (number and type) and application (intensity of usage) of the investment strategies. Discriminant analysis and chi-square tests were conducted to profile the clusters. Financial performance was examined by running multiple hierarchical regression and dominance analyses to determine meaningfulness of particular investment strategies within each of the SRI fund clusters.

Three basic SRI fund clusters were recognised: strong-intensity strategic heterogeneity, weak-intensity strategic heterogeneity and weak-intensity strategic homogeneity. The combination of SRI strategies used in the weak-intensity strategic homogeneity cluster significantly explained the variance in mid-term financial returns.

Fund managers may use these results to make more informed investment decisions on the selection and the application of SRI strategies.

Financial industry has significant and broad and not only economic but also social implications. This research effort results in better understanding of the SRI universe, potentially leading to a broader consideration of the societal impact of financial investment.

The author provided useful insights into existing bundles of SRI strategies used in the European SRI market, recognised dominant investment strategies within SRI strategy portfolios and reported how strategic variety is related to fund-level characteristics.

The chapter provides a radiography of the 2014–2020 Cohesion Policy, focusing on both main continuity and innovation elements (in terms of objectives, implementation rules and financial allocations) and on some of the likely effects of the current rules on the new European Union (EU) non-euro member countries. The closer link between EU funds and EU economic governance, which has been introduced in the current financial period, has the potential to influence negatively the evolution of the EU regional development disparities, especially in the EU eastern periphery. These new conditionalities (ex-ante and macroeconomic), whose main effects, in the case of non-compliance, would be the suspension of EU funds, might deteriorate even more the economic situation, particularly in those regions with the greatest needs in terms of infrastructure or administrative capacity. The Romanian case is particularly relevant for this debate.

The purpose of this study is to measure mutual funds' manager performance by attributing it to their abilities to choose better securities (selectivity effect) and to allocate these securities better than their benchmarks (allocation effect). The study enables the authors to examine the relative contributions of the commonly known asset-pricing factors in mutual funds' performance.

To examine managers' ability to steer funds' returns, the authors conduct a two-dimensional holdings-based analysis using factor-specific decomposition of funds' excess returns into their ability to select and allocate securities better than their benchmarks. Subsequently, the authors conduct an analysis of the covariance (ANCOVA) due to these factors in explaining funds' excess returns over time.

While managers' ability to choose better securities than the benchmarks (the selectivity effect) appears modest, some funds (especially the winners) allocate securities in their portfolios better than their benchmarks (the allocation effect) based on their exposures to certain factors (e.g. the momentum factor for the winner funds). However, although funds consistently gain through their ability to predict the size and value factors well, they do not consistently possess the skills to predict the momentum factor.

Although the paper analyzes all the available diversified funds, the sample excludes several other categories, such as thematic and international funds. Further, the analysis is based on equity-oriented Indian funds. Broader studies of changes in factor exposures and the inclusion of more factors apart from those conventionally used may shed more light on the managers' ability to maneuver these factors.

The results show that mutual fund managers lack persistence in their performance, even though some of them could predict specific factors well. Since the activity in active mutual funds could not lead to superior performance over time, investors could be better off by selecting cheaper passive funds for their long-term investments.

The paper presents a novel approach to studying funds' performance by conducting a two-dimensional holdings-based analysis to capture the relative contributions of common asset-pricing factors in the cross-section as well as over time.

The purpose of this paper is to examine the framework of the EU cohesion policy 2014-2020 with respect to its potential to secure not only the resources necessary for climate action in EU regions but also an integrated climate adaptation approach. It also examines the prospects for Greek regions with respect to climate adaptation.

Using the regional policy approach as it is generally formulated and applied in the context of the EU cohesion policy, this paper seeks to identify the policy objectives, the funding opportunities and the conditionalities for climate adaptation action. It also examines the above-mentioned elements for Greek regions.

The context of the EU cohesion policy constitutes a necessary but not sufficient condition for developing and implementing successful regional adaptation strategies. The process and content of regional policies are of significant importance in order for this context to be fully exploited.

Since this is the first time that climate adaptation at the regional level is directly addressed by cohesion policy, there is not much evidence on this issue, at least for Greek regions.

The approach followed in this paper may constitute a useful contribution to the formulation of regional adaptation strategies. This is of particular importance as climate adaptation, together with risk prevention, is one of the key thematic objectives of the EU cohesion policy 2014-2020.

This paper makes an original contribution by introducing and explaining a new challenging issue for the regional policies agenda, namely, the climate adaptation strategy, and stresses the need for a comprehensive approach to it, especially for Greek regions.

The purpose of this study is to analyze the intersection of research on impact investing and its closely related financial vehicles.

The paper explores 196 articles collected from Scopus and Web of Science using bibliometric and content analysis methodologies.

Despite a growing academic interest in impact investing, scholars generally investigate impact investing as a social phenomenon, using the specific financial mechanism of social impact bonds. This perspective potentially deflates the complex nature of impact investing, which actually combines both social and financial targets and uses a plurality of financial vehicles to reach its goals.

The emerging themes identified will provide both academics and practitioners additional tools to further the debate on impact investing and the understanding of its potential and limits according to the different financial forms it takes. This review should pave the way for a discussion about the boundaries of the social impact sector itself.

Despite the strong international commitment toward impact investing, tensions still exist. A comprehensive overview on the relevant aspects not yet thoroughly investigated will foster the growth of impact investments.

To the best of the authors’ knowledge, this is the first holistic overview of impact investing, that jointly examines both literature on impact investing and literature on the correlated financial products used in the industry. The result is a comprehensive report of what is known about impact investing in its different financial forms, opening up new pathways for future studies.