pisco_log
banner

Can “doing good” lead to “doing well”? — A Debate on Socially Responsible Investments

Gerui Cao

Abstract


Socially responsible investments have been recognized as practical vehicles to boost global corporation’s brand image. Among different major initiatives, Environmental, Social, and Governance (ESG) is a “popular” one and it essentially assigns ethical purposes to each investment and measures its societal impact and sustainability to address environmental, social and corporate governance concerns. Similar concepts can be found in the notion of Corporate Social Responsibility (CSR). Nonetheless, what are the actual driving forces behind this emerging movement? Is it a victory for social responsibility advocates of common welfares? Or rather, a new scheme for businesses to attract more investments? This paper aims to decode socially responsible investment mystery by deciphering different actors’ interests, analyze the movement’s financial impacts on corporation, and evaluate their outcome if possible. Essentially, this paper wants to address the question whether “doing good” can lead to “doing well”.


Keywords


Socially responsible investments; Debate; Financial

Full Text:

PDF

References


Iarossi , Giuseppe, and Neil Gregory. Creating Impact—The Promise of Impact Investing. IFC, 2019, www.ifc.org/wps/wcm/connect/66e30dce-0cdd-4490-93e4-d5f89 5c5e3fc/The-Promise-of-Impact-Investing.pdf?MOD=AJPERES&CVID=mHZTSds.

Kitzmueller, Markus, and Jay Shimshack. “Economic Perspectives on Corporate Social Responsibility.” Journal of Economic Literature , vol. 50, no. 1, ser. 51, 2012, pp. 51–84. 51, http:www.aeaweb.org/articles.php?doi= 10.1257/jel.50.1.51.

Klein, Michael. Firms Behaving Nicely: Incentives and Commitment. IFC, 2013, www.ifc.org/wps/wcm/connect/db91299e-688f-402a-bd07-4271ee234811/Focus12 _Fir ms_Behaving_Nicely.pdf?MOD=AJPERES&CVID=k5r5z83.

Kaplan, S. 2012. Executive compensation and corporate governance in the U.S.: Perceptions, facts and challenges. Chicago Booth Paper No. 12-42. Chicago, Illinois: University of Chicago Booth School of Business.

Ambec, Stefan, and Philippe Barla. 2006. “Can Envi- ronmental Regulations be Good for Business? An Assessment of the Porter Hypothesis.” Review of Energy Studies 14 (2) : 42–62.

Friedman, Milton. 1970. “The Social Responsibility of Business Is to Increase Its Profits.” The New York Times, September 13: 32–33, 122–26.

Freeman, R. Edward. 1984. Strategic Management: A Stakeholder Approach. Boston: Pittman-Ballinger.

Loureiro, Maria L., and Justus Lotade. 2005. “Do Fair Trade and Eco-Labels in Coffee Wake Up the Con- sumer Conscience?” Ecological Economics 53 (1): 129–38.

Barber, Brad M., Adair Morse, and Ayako Yasuda. 2018. “Impact investing.” August 7. https://ssrn.com/abstract=2705556 or http://dx.doi.org/10.2139/ssrn.2705556.

Bird, Lori, Claire Kreycik, and Barry Friedman. 2009. “Green Power Marketing in the United States: A Sta- tus Report (2008 Data).” National Renewable Energy Laboratory Technical Report NREL/TP-6A2-46581.

Eesley, Charles, and Michael J. Lenox. 2006. “Firm Responses to Secondary Stakeholder Action.” Strate- gic Management Journal 27 (8): 765–81.

Desai, Raj M., Homi Kharas, and Magdi Amin. 2017. “Combining Good Business and Good Development. Evidence from IFC Operations.” Global Economy and Development Working Paper 103, May, Brookings Institution, Washington, DC.

Eichholtz, Piet, Nils Kok, and John M. Quigley. Forth- coming. “Doing Well by Doing Good? Green Office Buildings.” American Economic Review.

GIIN and Symbiotics. 2018. “The Financial Performance of Impact Investing Through Private Debt.” GIIN, New York, NY. https://thegiin.org/assets/Financial%20P erformance%20of%20Impact%20Investing%20through%20Private%20Debt_web_ March%202018.pdf.

Gray, Jacob, Nick Ashburn, Harry Douglas, and Jessica Jeffers. 2017. “Great Expectations: Mission Preservation and Financial Performance in Impact investing.” Social Impact Initiative, Wharton School of Business, University of Pennsylvania, Philadelphia. https://socialimpact.wharton.upenn.edu/wp-content/uploads /2016/09/ Great-Expectations-Mission-Preservation- and-Financial-Performance-in-Impact-Investing.pdf.

Friede, Gunnar, Timo Busch, and Alexander Bassen. 2015. “ESG and Financial Performance: Aggregated Evidence from more than 2000 Empirical Studies.” Journal of Sustainable Finance & Investment 5 (4): 210–33.

Jaffe, Adam B., Steven R. Peterson, Paul R. Portney, and Robert N. Stavins. 1995. “Environmental Regu- lation and the Competitiveness of U.S. Manufactur- ing: What Does the Evidence Tell Us?” Journal of Economic Literature 33 (1): 132–63.

Kovner, Anna, and Josh Lerner. 2015. “Doing Well by Doing Good? Community Development Venture Capital.” Journal of Economics & Management Strategy 24 (3): 643–63.

Henriques, Irene, and Perry Sadorsky. 1996. “The Determinants of an Environmentally Responsive Firm: An Empirical Approach.” Journal of Environ- mental Economics and Management 30 (3): 381–95.

Pruitt, Stephen W., and Monroe Friedman. 1986. “Determining the Effectiveness of Consumer Boy- cotts: A Stock Price Analysis of Their Impact on Cor- porate Targets.” Journal of Consumer Policy 9 (4): 375–87.

Pruitt, Stephen W., K. C. John Wei, and Richard E. White. 1988. “The Impact of Union-Sponsored Boy- cotts on the Stock Prices of Target Firms.” Journal of Labor Research 9 (3): 285–89.

Davidson, Wallace N., Dan L. Worrell, and Abuzar El-Jelly. 1995. “Influencing Managers to Change Unpopular Corporate Behavior through Boycotts and Divestitures: A Stock Market Test.” Business and Society 34 (2): 171–96.

Rowley, Timothy J. 1997. “Moving Beyond Dyadic Ties: A Network Theory of Stakeholder Influences.” Acad- emy of Management Review 22 (4): 887–910.

Wartick, Steven L., and Philip L. Cochran. 1985. “The Evolution of the Corporate Social Performance Model.” Academy of Management Review 10 (4): 758–69.

Wood, Donna J. 1991. “Social Issues in Management: Theory and Research in Corporate Social Perfor- mance.” Journal of Management 17 (2): 383–406.

Reinhardt, Forest L., Robert N. Stavins, and Richard H. K. Vietor. 2008. “Corporate Social Responsibility through an Economic Lens.” National Bureau of Economic Research Working Paper 13989.

Porter, Michael E., and Claas van der Linde. 1995. “Toward a New Conception of the Environment– Competitiveness Relationship.” Journal of Economic Perspectives 9 (4): 97–118.

Margolis, Joshua D., Hillary Anger Elfenbein, and James P. Walsh. 2007. “Does It Pay to Be Good? A Meta-analysis and Redirection of Research on the Relationship between Corporate Social and Finan- cial Performance.” Unpublished.




DOI: http://dx.doi.org/10.18282/ff.v10i1.1617

Refbacks

  • There are currently no refbacks.