Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297693 
Year of Publication: 
2023
Citation: 
[Journal:] International Journal of Corporate Social Responsibility (JCSR) [ISSN:] 2366-0074 [Volume:] 8 [Issue:] 1 [Article No.:] 1 [Year:] 2023 [Pages:] 1-23
Publisher: 
Springer, Heidelberg
Abstract: 
We investigate the circumstances under which socially responsible investing (SRI) enhances firm long-term financial performance, and therefore provides incentives for firms to self-regulate their environmental performance. Aggregating portfolios across SRI mutual funds, we estimate the effect of SRI investment with environmental screening criteria on firm cost of equity capital. We find that accounting for interactions between firm and non-shareholder stakeholders, and potential agency costs associated with certain environmental activities of the firm, SRI can facilitate the alignment of firms' environmental and financial goals. We also find that an industry group's environmental performance and diversity influence the extent to which a firm in that group can benefit from SRI investment.
Subjects: 
Corporate environmental performance
Corporate social responsibility
Environmental self-regulation
Environmental, social, corporate governance
Socially responsible investing
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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