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Socially Responsible Finance and Investing: Financial Institutions, Corporations, Investors, and Activists

Book Description

A detailed look at the role of social responsibility in finance and investing

The concept of socially responsible finance and investing continues to grow, especially in the wake of one of the most devastating financial crises in history. This includes responsibility from the corporate side (corporate social responsibility) as well as the investor side (socially responsible investing) of the capital markets. Filled with in-depth insights and practical advice, Socially Responsible Finance and Investing offers an important basis of knowledge regarding both the theory and practice of this ever-evolving area of finance.

As part of the Robert W. Kolb Series in Finance, this book showcases contributed chapters from professionals and academics with extensive expertise on this particular subject. It provides a comprehensive view of socially responsible foundations and their applications to finance and investing as determined by the current state of research.

  • Discusses many important issues associated with socially responsible finance and investing, like moral hazard and the concept of "too big to fail"

  • Contains contributed chapters from numerous thought-leaders in the field of finance

  • Presents comprehensive coverage starting with the basics and bringing you through to cutting-edge, current theory and practice

Now more than ever, we need to be mindful of the social responsibilities of all investment practices. The recent financial crisis and recession has changed the financial landscape for years to come and Socially Responsible Finance and Investing is a timely guide to help us navigate this difficult terrain.

Table of Contents

  1. Cover
  2. Wiley Global Finance
  3. Series
  4. Title Page
  5. Copyright
  6. Acknowledgments
  7. Chapter 1: Socially Responsible Finance and Investing: An Overview
    1. INTRODUCTION
    2. CORPORATE SOCIAL RESPONSIBILITY
    3. SOCIALLY RESPONSIBLE INVESTING
    4. PURPOSE OF THE BOOK
    5. FEATURES OF THE BOOK
    6. INTENDED AUDIENCE
    7. STRUCTURE OF THE BOOK
    8. SUMMARY AND CONCLUSIONS
    9. REFERENCES
    10. ABOUT THE EDITORS
  8. Part I: Foundations and Key Concepts
    1. Chapter 2: Stakeholder Analysis
      1. INTRODUCTION
      2. STAKEHOLDERS VERSUS SHAREHOLDERS
      3. THE INPUT/OUTPUT MODEL
      4. STAKEHOLDERS AND CORPORATE STRATEGY
      5. Empirical Support for a Stakeholder Worldview
      6. TYPES OF STAKEHOLDER THEORY
      7. STAKEHOLDER ANALYSIS FOR INVESTORS
      8. TYPES OF STAKEHOLDERS: CUSTOMERS
      9. TYPES OF STAKEHOLDERS: SUPPLIERS
      10. TYPES OF STAKEHOLDERS: CONTEXTUAL
      11. OWNERS AS STAKEHOLDERS
      12. SUMMARY AND CONCLUSIONS
      13. DISCUSSION QUESTIONS
      14. REFERENCES
      15. ABOUT THE AUTHOR
    2. Chapter 3: Corporate Social Responsibility
      1. INTRODUCTION
      2. THE BUSINESS ETHICS LITERATURE
      3. THE FINANCE LITERATURE
      4. THE ACCOUNTING AND MARKETING LITERATURES
      5. EMERGING DIRECTIONS IN FINANCE SCHOLARSHIP
      6. SUMMARY AND CONCLUSIONS
      7. DISCUSSION QUESTIONS
      8. REFERENCES
      9. ABOUT THE AUTHORS
    3. Chapter 4: Business Models and Social Entrepreneurship
      1. INTRODUCTION
      2. SOCIAL ENTREPRENEURSHIP AS A BLUEPRINT FOR SHARED VALUE CREATION STRATEGIES
      3. MODELS OF SOCIAL ENTREPRENEURSHIP
      4. BUSINESS MODELS OF MICROFINANCE
      5. THE CASE OF SOCIAL IMPACT INVESTING
      6. SUMMARY AND CONCLUSIONS
      7. DISCUSSION QUESTIONS
      8. REFERENCES
      9. ABOUT THE AUTHOR
    4. Chapter 5: Fiduciary and Other Legal Duties
      1. INTRODUCTION
      2. BASIC FIDUCIARY PRINCIPLES AND THEIR IMPACT ON SRI
      3. OBEY THE TRUST DEED
      4. DUTY OF LOYALTY TO BENEFICIARIES
      5. BENEFICIARIES’ VIEWS AND THE DUTY OF IMPARTIALITY
      6. DUTY OF CARE
      7. STATUTORY REFORM
      8. SUMMARY AND CONCLUSIONS
      9. DISCUSSION QUESTIONS
      10. REFERENCES
      11. ABOUT THE AUTHOR
    5. Chapter 6: International and Cultural Views
      1. INTRODUCTION
      2. LEGAL ORIGIN
      3. ENDOWMENTS
      4. RELIGION
      5. CULTURAL VALUES
      6. SUMMARY AND CONCLUSIONS
      7. DISCUSSION QUESTIONS
      8. REFERENCES
      9. ABOUT THE AUTHOR
  9. Part II: Finance and Society
    1. Chapter 7: Social, Environmental, and Trust Issues in Business and Finance
      1. INTRODUCTION
      2. HISTORICAL CONTEXT OF SET ISSUES
      3. SET CHALLENGES AND OPPORTUNITIES IN BUSINESS AND FINANCE
      4. SUMMARY AND OUTLOOK
      5. DISCUSSION QUESTIONS
      6. REFERENCES
      7. ACKNOWLEDGMENTS
      8. ABOUT THE AUTHORS
    2. Chapter 8: Religion and Finance
      1. INTRODUCTION
      2. LITERATURE REVIEW
      3. EMPIRICAL ANALYSIS OF RELIGION AND FINANCIAL DECISION MAKING
      4. SUMMARY AND CONCLUSIONS
      5. DISCUSSION QUESTIONS
      6. REFERENCES
      7. ABOUT THE AUTHORS
    3. Chapter 9: Social Finance and Banking
      1. INTRODUCTION
      2. TYPES OF SOCIAL FINANCE
      3. SUMMARY AND CONCLUSIONS
      4. DISCUSSION QUESTIONS
      5. REFERENCES
      6. ABOUT THE AUTHORS
    4. Chapter 10: Managerial Compensation
      1. INTRODUCTION
      2. STRUCTURE AND LEVEL OF EXECUTIVE COMPENSATION
      3. DETERMINANTS OF STOCK OPTION COMPENSATION
      4. IS CEO COMPENSATION JUSTIFIABLE?
      5. STOCK OPTION GRANT MANIPULATION
      6. MANAGERIAL COMPENSATION AND CSR
      7. SUMMARY AND CONCLUSIONS
      8. DISCUSSION QUESTIONS
      9. REFERENCES
      10. ABOUT THE AUTHORS
    5. Chapter 11: Externalities in Financial Decision Making
      1. INTRODUCTION
      2. EXTERNALITIES CAN BE POSITIVE OR NEGATIVE
      3. POSITIVE EXTERNALITIES IN FINANCIAL MARKETS
      4. INCREASED NEGATIVE EXTERNALITIES
      5. SUMMARY AND CONCLUSIONS
      6. DISCUSSION QUESTIONS
      7. REFERENCES
      8. ABOUT THE AUTHOR
    6. Chapter 12: Real Estate and Society
      1. INTRODUCTION
      2. THE ECONOMIC PERFORMANCE OF GREEN BUILDINGS
      3. WHY DO CORPORATIONS PAY A PREMIUM FOR GREEN?
      4. IMPLICATIONS FOR INSTITUTIONAL INVESTORS: THE GRESB BENCHMARK
      5. SUMMARY AND CONCLUSIONS
      6. DISCUSSION QUESTIONS
      7. REFERENCES
      8. ABOUT THE AUTHORS
    7. Chapter 13: Federal Housing Policies and the Recent Financial Crisis
      1. INTRODUCTION
      2. PUBLIC POLICYMAKERS AND SOCIAL OBJECTIVES IN HOUSING
      3. THE HOUSING COLLAPSE AND THE FINANCIAL CRISIS
      4. FEDERAL HOUSING POLICY
      5. ALTERNATIVE APPROACHES FOR EXPANDING HOME OWNERSHIP
      6. SUMMARY AND CONCLUSIONS
      7. DISCLAIMER
      8. DISCUSSION QUESTIONS
      9. REFERENCES
      10. ABOUT THE AUTHORS
    8. Chapter 14: Predatory Lending and Socially Responsible Investors
      1. INTRODUCTION
      2. IN THE EYE OF THE BEHOLDER: CONTROVERSIAL CREDIT PRODUCTS
      3. A PALSY IN THE INVISIBLE HAND: DISTORTED CONSUMER FINANCE MARKETS
      4. THE EVOLVING LAW OF PREDATORY LENDING: A BRIEF OVERVIEW
      5. PREDATORY WARNING SIGNS FOR THE SOCIALLY RESPONSIBLE INVESTOR
      6. SUMMARY AND CONCLUSIONS
      7. DISCUSSION QUESTIONS
      8. REFERENCES
      9. ABOUT THE AUTHOR
    9. Chapter 15: Use and Misuse of Financial Secrecy in Global Banking
      1. MICROECONOMICS OF FINANCIAL SECRECY
      2. SUMMARY AND CONCLUSIONS
      3. DISCUSSION QUESTIONS
      4. REFERENCES
      5. ABOUT THE AUTHOR
  10. Part III: Corporate Engagement
    1. Chapter 16: Corporate Social Responsibility and Corporate Governance
      1. INTRODUCTION
      2. THE PLACE OF CSR IN THE CORPORATE GOVERNANCE DEBATE
      3. CSR AS A MULTIFIDUCIARY MODEL OF CG
      4. CSR SOCIAL NORMS AND SELF-SUSTAINING INSTITUTIONS OF CG
      5. SOCIAL CONTRACT AS AN EQUILIBRIUM SELECTION DEVICE
      6. CORRESPONDENCE TO THE MULTISTAKEHOLDER MODEL OF CG
      7. SUMMARY AND CONCLUSIONS
      8. DISCUSSION QUESTIONS
      9. REFERENCES
      10. ABOUT THE AUTHOR
    2. Chapter 17: Measuring Responsibility to the Different Stakeholders
      1. INTRODUCTION
      2. MEASURING SOCIAL PERFORMANCE
      3. CSR COMPONENTS: THE DIFFERENT STAKEHOLDERS AND MEASURES
      4. SUMMARY AND CONCLUSIONS
      5. DISCUSSION QUESTIONS
      6. REFERENCES
      7. ABOUT THE AUTHORS
    3. Chapter 18: Corporate Philanthropy
      1. INTRODUCTION
      2. EVOLVING VIEWS OF CORPORATE PHILANTHROPY
      3. CORPORATE PHILANTHROPIC PRACTICES
      4. EVIDENCE ON THE MOTIVATION AND IMPACT OF CORPORATE PHILANTHROPY
      5. THE IMPACT OF CORPORATE GIVING ON FIRM PERFORMANCE
      6. SUMMARY AND CONCLUSIONS
      7. DISCUSSION QUESTIONS
      8. REFERENCES
      9. ABOUT THE AUTHOR
    4. Chapter 19: Institutional Investor Activism
      1. INTRODUCTION
      2. HOW INSTITUTIONAL INVESTORS DEFINE SRI
      3. SHAREHOLDER PROXY PROPOSALS AS ACTIVISM TOOLS
      4. SOCIAL RESPONSIBILITY PROPOSALS SUBMITTED BY INSTITUTIONAL INVESTORS
      5. VOTING AS AN ACTIVISM TOOL
      6. COLLECTIVE EFFORTS TO PROMOTE MARKET-WIDE CORPORATE REFORMS
      7. THE FUTURE OF ESG-FOCUSED INVESTMENT AND ACTIVISM STRATEGIES
      8. SUMMARY AND CONCLUSIONS
      9. DISCUSSION QUESTIONS
      10. REFERENCES
      11. ABOUT THE AUTHORS
    5. Chapter 20: Social Activism and Nongovernmental Organizations
      1. INTRODUCTION
      2. CSR IN FINANCE AND INVESTMENT: STAKEHOLDERS AND STRATEGIES
      3. SOCIAL ACTIVISM AND THE RISE OF CIVIL SOCIETY ORGANIZATIONS AND NGOS
      4. SRI AND SOCIAL ACTIVISM
      5. SUMMARY AND CONCLUSIONS
      6. DISCUSSION QUESTIONS
      7. REFERENCES
      8. ABOUT THE AUTHORS
  11. PART IV: Socially Responsible Investing
    1. Chapter 21: Corporate Socially Responsible Investments
      1. INTRODUCTION
      2. DEFINING CSRI
      3. CSRI AND FIRM PERFORMANCE
      4. SUMMARY AND CONCLUSIONS
      5. DISCUSSION QUESTIONS
      6. REFERENCES
      7. ABOUT THE AUTHOR
    2. Chapter 22: SRI Mutual Fund and Index Performance
      1. INTRODUCTION
      2. SRI
      3. SRI PERFORMANCE EVALUATION
      4. SUMMARY AND CONCLUSIONS
      5. DISCUSSION QUESTIONS
      6. REFERENCES
      7. ABOUT THE AUTHOR
    3. Chapter 23: Performance Implications of SR Investing: Past versus Future
      1. INTRODUCTION
      2. RETURNS ON SIN STOCKS
      3. THE PAST VERSUS FUTURE PERFORMANCE OF SRI STRATEGIES
      4. SUMMARY AND CONCLUSIONS
      5. DISCUSSION QUESTIONS
      6. REFERENCES
      7. ABOUT THE AUTHOR
    4. Chapter 24: Money-Flows of Socially Responsible Investment Funds around the World
      1. INTRODUCTION
      2. INSTITUTIONAL BACKGROUND
      3. CONJECTURES
      4. DATA AND METHODS
      5. DETERMINANTS OF MONEY FLOWS
      6. DETERMINANTS OF FUTURE RETURNS
      7. SUMMARY AND CONCLUSIONS
      8. DISCUSSION QUESTIONS
      9. REFERENCES
      10. ABOUT THE AUTHORS
  12. Answers to Chapter Discussion Questions
    1. CHAPTER 2 STAKEHOLDER ANALYSIS
    2. CHAPTER 3 CORPORATE SOCIAL RESPONSIBILITY
    3. CHAPTER 4 BUSINESS MODELS AND SOCIAL ENTREPRENEURSHIP
    4. CHAPTER 5 FIDUCIARY AND OTHER LEGAL DUTIES
    5. CHAPTER 6 INTERNATIONAL AND CULTURAL VIEWS
    6. CHAPTER 7 SOCIAL, ENVIRONMENTAL, AND TRUST ISSUES IN BUSINESS AND FINANCE
    7. CHAPTER 8 RELIGION AND FINANCE
    8. CHAPTER 9 SOCIAL FINANCE AND BANKING
    9. CHAPTER 10 MANAGERIAL COMPENSATION
    10. CHAPTER 11 EXTERNALITIES IN FINANCIAL DECISION MAKING
    11. CHAPTER 12 REAL ESTATE AND SOCIETY
    12. CHAPTER 13 FEDERAL HOUSING POLICIES AND THE RECENT FINANCIAL CRISIS
    13. CHAPTER 14 PREDATORY LENDING AND SOCIALLY RESPONSIBLE INVESTORS
    14. CHAPTER 15 USE AND MISUSE OF FINANCIAL SECRECY IN GLOBAL BANKING
    15. CHAPTER 16 CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE GOVERNANCE
    16. CHAPTER 17 MEASURING RESPONSIBILITY TO DIFFERENT SHAREHOLDERS
    17. CHAPTER 18 CORPORATE PHILANTHROPY
    18. CHAPTER 19 INSTITUTIONAL INVESTOR ACTIVISM
    19. CHAPTER 20 SOCIAL ACTIVISM AND NONGOVERNMENTAL ORGANIZATIONS
    20. CHAPTER 21 CORPORATE SOCIALLY RESPONSIBLE INVESTMENTS
    21. CHAPTER 22 SRI MUTUAL FUND AND INDEX PERFORMANCE
    22. CHAPTER 23 PERFORMANCE IMPLICATIONS OF SOCIALLY RESPONSIBLE INVESTING: PAST VERSUS FUTURE
    23. CHAPTER 24 MONEY-FLOWS OF SOCIALLY RESPONSIBLE INVESTMENT FUNDS AROUND THE WORLD
  13. Index
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