White Papers

How and Why SRI Performance Differs from Conventional Strategies

Executive Summary of White Paper: Exploration of the Cross-Sectional Return Distributions of Socially Responsible Investment Funds

This white paper received an Honourable Mention for the 2014 Sustainalytics Prize for Excellence in RI Research. Presented during the annual Principles for Responsible Investment (PRI) Academic Conference, the award recognizes outstanding academic research in the area of responsible investment (RI) and its outcomes.

In recent decades, institutional and individual investors have increasingly considered social consciousness as part of their overall investment program. Indeed, from 1995 through 2012 (the latest data available), the amount of assets under management in (SRI) strategies grew from $639 billion to $3.7 trillion, a gain of 486%. Over the same period, overall assets under management (including conventional, non-SRI assets) grew 376%. It is estimated that SRI assets now comprise approximately 11% of assets under management in the U.S.

Along with the growth of interest in SRI investing there has been an increase in the volume of research analyzing the impact that social investment policies have on portfolio performance. Advocates of SRI strategies would like to have confidence that constraining investment choice does not adversely impact portfolio performance; similarly, proponents of conventional strategies are interested in understanding if there may be some financial benefit to investing with values in mind.

To find out the results of our study, download the full PDF.