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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.

This study explores the practical application of the Shariah screening process and how it could be enhanced by converging the same with the ethical screening of stocks.

This study adopts a qualitative research methodology by combining the qualitative descriptive approach and content analysis.

The findings of this research suggest that there is scope to converge ethical screening of stocks with Shariah Screening as the lex loci applicable to Shariah screening is derived from Shariah, which considers ethics as part of determining its rules.

The data from this study reveal several practical applications, the ultimate goal of which is to help the policymakers and stakeholders understand the relevance of the Shariah screening of stocks and get a streamlined screening process, paving the way to enhance the same using ethical screening criteria to develop its function to become much more relevant irrespective of the denomination of faiths.

This is original research, which is expected to contribute to understanding the extent to which Shariah screening can be enhanced by integrating the ethical stock screening dimension to it.

This paper aims to provide an overview of the literature to point out similarities and differences among private ethical investors across countries and time. Over the past three decades, many surveys have been conducted to advance the understanding of the demographic characteristics, motivation and morals of private ethical investors across countries and time. To date, the survey-based evidence on private investors into ethical funds is geographically rather segmented, and the research questions are fairly diverse. This permits only very temporally or regionally selective conclusions. Thereby, the authors identify interesting topics for future research.

To identify the relevant literature for our review, the authors carried out a structured Boolean keyword search using major library services and databases.

When questions about negative screening criteria are presented in a direct investment context, the consensus of private ethical investors “worldwide” (on average) is that social screening issues are most important, followed by ecological and moral topics. The percentage of ethical funds in the fund portfolio of the average private ethical investor in Europe seems to increase when the investor exhibits high degrees of pro-social attitudes and perceived consumer effectiveness. European private ethical investors are of the opinion that ethical funds perform worse but are less risky than conventional funds.

The authors make suggestions on how investment companies should design their funds so that they can attract more socially responsible investors.

The paper is of particular value because it focuses on private investors in the fast growing retail market of socially responsible investment funds.

The purpose of this paper is to assess the compatibility between the religious investing criteria of some Christian mutual funds and the “ Interfaith Center for Corporate Responsibility” (ICCR) shareholder resolutions about corporate unethical/illegal practices.

Among all ICCR 2007‐2008 shareholder resolutions, the paper analyze unethical practices that could lead to corporate illegalities for business corporations that are included in the portfolios of Christian mutual funds. It will determines to what extent such companies have codes of ethics that clearly explained the expected behaviour from their employees, managers, or directors about given ethical issues: sexual orientation discrimination, conflicts of interest on the board and slave labour in the supply chain.

About the issue of slave labour in the supply chain, managers of Christian mutual funds could not invoke ignorance since in the code of ethics of one company, there is no provision dealing with slave labour. Concerning conflicts of interest on the board, managers of Christian mutual funds could not identify potential risks related to those companies, since the problem is the applicability of their codes of ethics. Finally, companies have very different ways to address or not the issue of sexual orientation discrimination in their codes of ethics.

The originality of the paper is twofold: first to compare companies Christian mutual funds are investing in (on the basis of Christian selection criteria) and companies for which there are ICCR resolutions (the aim of such resolutions is to change some questionable or unethical aspect of a given business corporation), and second to see to what extent corporate codes of ethics are written in a way to reduce or increase the potentiality of ethical conflicts.

Pension funds are demanding increasingly more information about the levels of corporate social responsibility achieved by companies through the use of corporate social responsibility reports to select which firms’ stocks to invest in. This could improve or reduce the financial performance achieved by pension plans. Therefore, this chapter examines the financial performance obtained by equity pension plans, distinguishing between solidarity pension plans, ethical pension plans and conventional pension plans.

We use a sample of 153 individual system pension plans (129 conventional pension plans, 6 solidarity pension plans and 18 ethical pension plans). Using these sample data, we implement the robust random effects panel data methodology.

The results show that ethical pension plans perform similarly to traditional pension plans, while solidarity pension plans significantly outperform conventional pension plans.

We do not know what weights managers give to environmental, social and corporate governance criteria, which may influence the financial performance of pension plans.

The results of this study could be relevant for pension plan managers that may be considering the integration of ethical screening in their management strategies in order to offer differentiated products and for investors who would like to invest in ethical pension plans without compromising their financial performance.

Previous studies have analysed the financial performance obtained by traditional and ethical funds, but in this chapter we compare the financial performance of traditional, solidarity and ethical pension plans.

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 mutual fund superiority, comparing the performance of 646 Islamic mutual funds with 475 ethical funds and conventional proxies.

This study uses statistical methods including paired t-statistics of independent samples, one-way Bonferroni test–analysis of variance–F-statistic for testing means equality, the chi-squared test for median equality and regression models corrected for heteroscedasticity. These methods are used to identify superiority of mutual funds and to validate the significance of the results.

The findings confirm the superiority of conventional funds over ethical funds and ethical funds over Islamic funds. Both ethical and Islamic funds, however, outperform conventional proxies during some recessionary periods. Moreover, stronger performance is recorded for Islamic funds in Europe and North America regions and across age and asset allocation categories, but limited support for reversal fund size, composition focus and reversed price effect.

These findings should assist investors when deciding to invest and motivate Islamic and ethical funds to improve their portfolio formation and asset allocation strategies set by their professional managers.

The originality of this study is in its comprehensive approach in that it compares the performance of funds after accounting for such characteristics as fund objectives, size, age, asset allocation, geographical investment focus, fund composition focus, share price levels and the effect of global crises. This study approach is not only original and productive in documenting Islamic funds’ performance for the past three decades (1990–2022) but can also update the literature on these characteristics collectively and individually.

The objective of this chapter is twofold. It first introduces the theme of the book. There are many ways of looking at socially responsible investment (SRI). It can be viewed as a financial product where the financial performance is the outmost important aspect and cannot be compromised. Or it can be regarded as a force for change to promote and stimulate a more sustainable development. In this chapter we provide a literature review on SRI especially on the notion of the impact and how it has been addressed so far in the literature. The second objective of the chapter is to provide an overview of the volume by introducing each chapter.

This chapter reviews the literature on SRI as well as the chapters included in this volume.

If SRI is about making a change toward sustainability, we ought to study its societal and environmental impacts. Although scholar articles on SRI have gained importance in the two last decades, very little is known on its impact. Research has developed from a narrow concern with negative screening and divestment in isolated cases to a rigorous analysis of its financial performance across a range of ethical and ESG issues. While we have identified some studies that are beginning to explore the potential impact of SRI for society, this remains a crucial area to explore.

The chapter contributes to the debates on the societal impact of SRI, a debate that needs to be continued even if or just because it raises some fundamental questions that are complex and difficult but also necessary to advance SRI.

Socially responsible investment (SRI) has gained importance as about one out of eight US dollars is currently invested based on screening in the USA. However, European private investors are generally much more reluctant to invest in shares, and in Austria, only 7 percent of private households hold shares. There is nevertheless some interest in “green shares” (a sub‐class of SRI comprising shares that are screened for their least impact on the environment) as a representative survey recently exhibited that 8 percent of respondents were definitely interested in holding “green shares”. Econometric estimates of an empirical model explaining the respondents' willingness to invest in green shares showed that education, income, environmental awareness and the expected profit are the main explanatory variables. Based on these results, conclusions are drawn regarding marketing strategies for “green shares”. In particular, credibility both regarding financial aspects (competitive return), and environmental and social criteria have to be guaranteed to make more consumers interested in investing in green shares.

While the literature contains a number of studies of ethical investment funds, relatively little is known about church investment processes and practices despite the significant role they have played in the development of the sector. This paper attempts to address this lacuna by studying the ethical investment programmes of two UK churches: the Methodist Church and the Church of England. The paper initially explores the relationship between the Judaeo‐Christian church and the development of the ethical investment movement. This history reveals an engagement both at the institutional and individual level that challenges the assumed sacred secular divide now commonplace within the literature and the more recent guardian‐advocate dichotomy. Second, the paper delineates the way in which the churches theologically conceptualise this engagement and describes how these values are proceduralised through the operation of the funds. The final section provides an immanent critique of church investments both at a performative and theological level. The aim of this concluding section is to engage with the churches in exploring the broader potential for the church in effecting social change.