Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
Carleton
Centre for
Community Innovation
Exploring factors that influence social retail investors: Evidence from Desjardins Fund
Dominique Diouf, Tessa Hebb, and El Hadji
WP 13-01
2 | P a g e
Exploring factors that influence social retail investors: Evidence from
Desjardins Fund
Dominique Diouf, Laval University, Quebec (QC), Canada
Tessa Hebb, Carleton Centre for Community Innovation, Carleton University, Ottawa, Canada
and El Hadji, University of Montreal, Montreal (QC), Canada
Abstract
Most studies on the choices, motivations and behavior of investors consist of a segmentation
focused on socio-demographic characteristics such as age, income, education level etc. Such
approaches seem to simplify, even mutilate, reality by aggregating data about observable
variables and considering investors as homogeneous groups. These perspectives are often inspired
by a scientific approach that consists of separating to better understand the observed phenomena.
By considering individual as a «homo economicus», that is to say, a rational and autonomous
individual who makes decisions motivated by material gains, these studies fail to recognize all the
complexity that shapes human behavior. Even though more researchers attempt to explore other
factors such as those related to psychological aspects or social values, it should be noted that they
do not always take into account the multidimensional nature of the observed phenomena. This
paper argues that to understand the behavior and choices of investors as regards SRI, we must
consider social investors as complex individuals and also take into account the influence that the
institution may exercise (thanks to the role of SRI advisors and the other strategies for promoting
socially responsible investment). We must also adopt a more open approach by understanding the
characteristics and behaviors of individual social investors in relation to those of conventional
investors. Our research builds on the theory of complexity framework. According to this theory,
the truth must be thought of as a system where there is inter-influence between the whole and the
parts. In this perspective, the individual must not only be seen as rational and autonomous, but
more as an individual aggregation of overlapping identities. Our research provides evidence from
focus Desjardins Fund, with data gathered by Desjardins from online surveys. We subjected the
data to bivariate and multivariate analysis. This qualitative methodology is complimented by a
series of 10 semi-structured interviews with managers, analysts and advisors. The results show
that while demographic characteristics still remain important in understanding the behavior and
attitudes of social investors, it is their social values, environmental, social and governance (ESG)
issues, financial return considerations and the role played by the institution that are significantly
associated with socially responsible investment of the portfolio. Our research highlights the
complexity surrounding the phenomenon of SRI and has several implications both in terms of
theory and practice.
Keywords: socially responsible investing, SRI, investor choice, investment advisors, ESG,
Acknowledgements: We would like to thank Desjardins for their assistance in this research,
particularly in providing data for analysis, interviews and expert advice. We would particularly
want to thank Rosalie Vendette and Benjamin Commerie of Mouvement Desjardins and all the
participants of the qualitative interviews for their assistance with the research. We would like to
acknowledge the role of the Social Sciences and Humanities Research Council is assisting with
the funding for this research.
3 | P a g e
1. INTRODUCTION
1.1- Contextualisation
In recent years, SRI has been radically transformed from an activity carried out by a very
small number of investment funds that specialize in retail business - with a negligible
economic impact- to an investment philosophy embraced by an increasing proportion of
institutional investors involving pension funds and insurance companies (Eurosif, 2003;
Gribben and Faruk, 2004). In its latest study published in 2010, Eurosif argues that the
global market of SRI can be estimated at around € 7, 6 trillion, of which Europe holds the
largest share. SRI has continued to grow faster than the assets under management of
conventional investments (Eurosif, 2010). During the most recent financial crisis, from
2007 to 2010, the total universe of professionally managed assets remained almost stable
while SRI assets, as always (documented in the report of Eurosif), enjoyed healthy
growth. Regarding the specific case of Canada, all assets invested according to social
responsibility principles are estimated to $530.9 billion as of June 30, 2010 (SIO.2011).
This amount represents 19.1% of assets under management in Canada in 2010, roughly
the same share as in 2008 (SIO, 2011).
The important role of information, the role of women investors in SRI and the idea that
investors should not sacrifice performance are three main reasons that contribute to the
growth of SRI, particularly in the US (Schueth, 2003). Beyond these three main reasons,
contextual factors such as the demand from institutional investors, international
initiatives, the pressures of media and NGOs as well as the role of individual investors
are determining factors in the development of SRI (Eurosif, 2010).
The idea that investors should not sacrifice performance results from a progressive
erosion of an old design of socially responsible investing (Wood and Jones, 1995;
Freeman, 1999) which is in the process of giving way to a new paradigm by which the
financial materiality of ESG factors is demonstrated (Keefe, 2007). Socially responsible
4 | P a g e
investing is increasingly seen as a performance factor, an engine of shareholder profit by
managing the risks related to ESG (Hebb et al., 2012).
With the development of the socially responsible investing market, the importance of
values increases. It is increasingly apparent that the values have a significant impact on
investment (Bauer and Smeets, 2010a). There is therefore need, beyond the performance
of SRI, to know more about the psychology of investors in the context of socially
responsible investment (Dunfee, 2003; Lewis, 2002). However, taking into account the
social values and exploring other factors increase the complexity in the specific field of
socially responsible investing where facts and beliefs seem to be combined (Statman,
2000).
For the purpose of this paper, we define social or socially responsible investor as an
individual who holds at least one SRI mutual funds that can be a mutual fund with a
social orientation, focused on the environment, or a combination of both (Bauer and
Smeets, 2010a). Thus, the question of why some individual investors choose SRI while
others do not practice it (Glac, 2009) becomes crucial
Our research seeks contribute to the understanding of the motives, choices and attitudes
of social retail investors by exploring the multidimensional factors associated with
socially responsible investment decisions.
1.2- Structuring research questions and objectives
The objective of this research is to explore the factors associated with socially
responsible investment decisions in order to better understand how they influence the
choices of individual social investors and analyze theoretical and practical implications.
It revolves around the following questions:
- Are there distinguishing characteristics that are associated with those who choose
SRI products? Can we find a common indicator for SRI choices?
5 | P a g e
- What are the common demographic characteristics (age, gender, geography,
profession, income, education, etc.)?
- Are there common attitudinal (values-based) characteristics?
- Is awareness of environmental, social, and governance issues a determining factor
in decisions on SRI investment?
- What are the expectations and both in terms of ESG values and financial returns?
- What are the gaps and trade-off between the ethical and ESG issues and the
financial return?
- What is the role of advisor in SRI investment selection?
- What theoretical and practical implications can be drawn from the results of this
study?
The answers to these questions require several types of analysis (univariate, bivariate,
multivariate) applied to the segment of social investors as well as to the segments of
conventional investors and of those who hold both types of investment.
The ultimate objective is not only to compare the different segments of investors but also
to grasp how different variables (socio-demographic, ESG issues, attitudes, trade-offs,
role of the institution) influence, to varying degrees, the choice of social investors.
2. PROBLEMATIC
2.1. Focusing on four fundamental SRI issues
Looking through the literature on socially responsible investment, we realize that it is
often dominated1 by the debate about the performance of conventional funds versus SRI
funds. Thus, most studies attempt to measure the phenomenon by observing its evolution
in terms of performance and changes in market size. The results of these studies,
however, lead to a kind of "dichotomy" (Girard et al., 2005). While some studies find that
there is a positive association between social and financial performance (Russo and
Fouts, 1997; Reppeto and Austin, 2000; Orlitzky, Schmidt and Rynes, 2003; Derwall,
1 It must be recognized number of studies, in recent years, explore other issues such as shareholder
engagement or the motivations of social investors.
6 | P a g e
Bauer and Koedijk, 2005 etc..) others argue that there is a negative association (
Hamilton, Jo and Statman, 1993; Guerard, 1997; Plating and Scholtens, 2001, Sauer,
1997, Bauer, Koedijk, and Otten, 2002; Kacperczyk and Harrison, 2006; Statman and
Glushkov, 2008). By focusing the debate on fund performance, these studies are examine
the macro-economic paradigm and highlight fund structure at the expense of deepening
our understanding of the role individual choice plays in SRI.
Interest in the behavior of individual investors dates back to 1970, particularly through
empirical studies (Naggy and Obenberger, 1994). However, they rely on utility theory
and focus more on the “macro” models by aggregating individual behaviour ( Naggy and
Obenberger, 1994, Bauer and Smith, 2010a). As a result, theses studies hide entire
sections of the inherent complexity of decisions and choices in the field of investment.
In order to be more concise, we review, as part of this research, four fundamental issues
explored by studies on the behavior of social investors: The socio-demographic
characteristics, the motives of ethical investors, the influence of social values and norms
in investment decisions and the role of information and communication. However, these
four issues are not disparate but rather cross-thematic.
2.1.1 Socio-demographic characteristics
As indicated by Bauer and Smeets (2010a), socio-demographic factors, such as age,
gender, level of education, income have often been used to understand the behavior of
investors, particularly the conventional investors (Barber and Odean, 2001; Graham and
Kumar, 2006; Bailey, Kumar and T.Ng, 2009). The same socio-demographic factors were
used to compare social investors to conventional investors (McLachlan and Gardner,
2004). Thus, Rosen et al. (1991) found that, compared to conventional investors, social
investors are younger and have a higher level of education. In the same vein, Hayes
(2001) suggests that, unlike older investors, investors aged between 18 and 24 years are
most prominent environmental concerns than financial performance. Tippet and Leung
(2001) argue that, compared to conventional investors, ethical investors in Australia are
predominantly female, younger, more educated but holding less diversified and lower
7 | P a g e
portfolios. However, these studies implicitly consider social investors as a homogeneous
group because they use aggregate data (Bauer and Smeets, 2010a).
2.1.2 The motives of ethical investors
By committing to investing in socially responsible manner, social investors want, above
all, to know whether the different investment products to be selected are in line with their
values (Pivo, 2005). This basic assertion is however not shared by all authors in the
socially responsible investing area. Lewis and Mackenzie (2000a) were among the first to
question this simplistic approach, through a quantitative study. Based on a sample of
1146 ethical investors in Britain, they explore the impact of the exclusion of certain
companies in their portfolios. This example is quite instructive on whether moral
commitment, rather than economic incentives, is the engine of economic decision.
These authors find that ethical investors are neither “devils” nor “saints” and can be both
value-laden ethical and unethical. Thus, Lewis and Mackenzie indicate that people are
willing to put their money where their morality is even though a direct link between
money and principles may not exist. The findings of this study are supported by the
research of Webley et al. (2001) who explore, through an experimental approach, the
issue of the commitment of ethical investors. They find that ethical investors generally
remain invested in ethical investment funds even when they perform badly. In the same
vein, Lewis (2001) uses a qualitative methodology (focus group) and puts forward the
idea of moral dilemma: many investors called "ethical investors" are investing in both
ethical and unethical funds. Glac (2009) indicates the results of most of these studies
show that ethical investors are also as interested in the financial performance of their
investments as conventional investors (Cullis et al. 1992; Lewis and Mackenzie, 2000a,
b; Mackenzie and Lewis, 1999; Rosen et al., 1991).
2.1.3 Influence of social values on behavior
The influence of social values can be addressed in several ways. Bollen (2007) shows
that social investors, compared to conventional investors, are more loyal to their funds.
This loyalty remains intact even if the fund records negative results. Based on the concept
8 | P a g e
of heterogeneity, Bauer and Smeets (2010a and 2010b) also discovered that a large
segment of values-oriented investors are more loyal to their mutual funds than others.
Focusing their research on the fund managers, Hong and Kostovetsky (2009) explore the
influence of political values on investments. They find that fund managers that support
the Liberal Democratic Party in the United Kingdom tend to select the funds that record
good social and environmental performance. In the same vein, Kacperczyk and Hong
(2009) questioned whether social norms have an impact on the markets. To answer this
question, they focus their research on sin stocks. They find that institutions that are
framed by social norms such as pension funds are less likely to hold sin stocks than other
funds who are "natural arbitrageurs" and receive less coverage from analysts compared to
other funds with similar characteristics. Renneboog, ter Horst and Zhang (2006) found
that, compared to conventional investors, socially responsible investors place less
emphasis on risks and fees and the funds that have initiated shareholder activism
practices and have house-in- research in the field of SRI attract more stable investors. In
general, most of these studies mentioned above address the social values issue in relation
to demographic characteristics. While Hong and Kacperczyk (2009) and Hong and
Kostovetsky (2009), Bollen (2007) assume that social investors are a homogenous group
(Bauer and Smeets, 2010a), other research (Barber and Odean, 2001; Korniotis and
Kumar 2010; Massa, 2003; Bailey, Kumar and Ng, 2010, Bauer and Smeets, 2010a and
2010b) argue that social investors are heterogeneous. While these two groups of
researchers all use segmentation (age, gender, etc.), their approach appears to be
different. The first group bases their approach on observable characteristics and uses
aggregate data to explain the behavior or values of individual investors. In addition to the
observable characteristics, some authors, among the second group, take into account
other aspects such as beliefs and attitudes at the individual level and the impact of non-
monetary value on investment decisions (Bauer and Smeets, 2010a and 2010b) or address
heterogeneity (latent heterogeneity) in relation with the types of investments (Bauer and
Smeets, 2010a and 2010b; Bailey, Kumar and T. Ng, 2010).
9 | P a g e
2.1.4 The role of information:
Information and communication are increasingly an important part of research in the field
of responsible investment. Tarrazona-Barreda et al. (2011) indicate that, beyond the
return and diversification, participants (in this case, investors) invest more when they are
informed of the socially responsible nature of the funds. Statman (2008) argues that it is
the role of advisor to explore social preferences, ethical, religious clients in the same way
he explores attitudes vis-à-vis risk (p.25). Young et al., (2010) address the role that
information can play by highlighting certain variables such as “attitude-behaviour gap” or
values-action gap . Indeed, many clients express their desire to take an interest in ethical
products but find it difficult to put this into practice. Beyond mere information, it is also
crucial to establish incentives and even labels to accompany the efforts of consumers
(Young et al.2010). Some authors like Grinblatt and Keloharju (2001) attempt to capture
how distance, language and culture can influence the decisions of investors in Finland.
They show that investors are more willing to hold, buy or sell stocks in firms located
close to them and that communicate in their native language or are lead by individuals
with whom they share the same cultural background.
The following table illustrates the four issues highlighted above.
Table 1: Summary table of the factors associated with SRI
Explored Issues Questions
raised
Methodological
approach
Fundamental
concepts
Authors
Socio-
demographic
characteristics
What are the
characteristics
of social
investors? What
differentiates
them from the
conventional
investors?
Quantitative aggregate
data
Social investors,
conventional
investors, age,
gender, education,
income, etc.
Barber and
Odean, (2001);
Graham and
Kumar (2006)
and Bailey,
Kumar and Ng.
(2009); Rosen et
al. (1991); Hayes
(2001); Tippet
and Leung
(2001).
Motivations of
ethical investors
What are the
motivations of
ethical
investors ?
Quantitative survey,
qualitative approach
(focus group),
experimental approach,
focus group
Ethical values and
non ethical values
Moral dilemma,
return
differentials,
Lewis (2001);
Cullis et al.
(1992); Lewis
and
Mackenzie,(2000
10 | P a g e
commitment. a, b); Mackenzie
and Lewis (1999)
Rosen et al.(
1991)
Influence of social
(political values)
What are the
impacts of
social (political)
values on SRI
decisions?
Survey, Quantitative
data from institutions/
individual level,
Observable
characteristics/psychol
ogical constructs
Segmentation
Conjoint analysis
Institutional
investors/
individual
investors;
Loyalty,
commitment,
Heterogeneity/Ho
mogeneity, latent
heterogeneity,
type of
investments, non-
pecuniary
benefits, past
returns
Bollen (2007) ;
Bauer and
Smeets (2010a et
2010b); Hong
and Kacperczyk
(2009); Hong and
Kostovetsky
(2009); Barber
and Odean, 2001;
Korniotis and
Kumar 2010 ;
Massa, 2003 ;
Bailey, Kumar
and Ng, (2010 );
Renneboog, ter
Horst & Zhang
(2006
The role of
information and
communication
Beyond return,
diversification
and social
values, does
information play
a specific role in
investment
decision?
Survey, qualitative,
quantitative approach,
regression
Advisor,
information,
–“behaviour gap”;
“values–action
gap”; culture,
language and
distance
Barreda-
Tarrazona et al.
(2011) ; Statman
(2008) ; (Young
et al., 2010);
Grinblatt and
Keloharju (2001),
While these studies have helped to better understand the behavior of investors and
socially responsible investors, it is nevertheless true that they are limited especially in
terms of their theoretical approach. Not only do they aggregate the data and try to
homogenize social investors (Bauer and Smeets, 2010b), but in addition, they do not
sufficiently demonstrate the complexity of the behavior of investors who may be affected
by many factors.
Addressing these limitations, we base our research on complexity theory. While
complexity theory has often been used in social sciences, it serves less, however, as a
basis for studies in behavioural finance. Using this theory can contribute not only to
challenging the dominant positivism, particularly utility theory, but also to show that,
because of the specificity of the field of responsible investment, it is important to
emphasize an approach based on complexity.
11 | P a g e
2.2 SRI as complex phenomenon
From the historical point of view, SRI has experienced a double movement that is both
societal and economic (Arjalies, 2010). Regarding the societal movement first, the
legitimacy of SRI, particularly in the U.S. and Europe, has long been based on individual
and social value systems which contributed to the questioning of the rule of economic
logic. From the economic point of view then, SRI is increasingly recognized today by
conventional finance as the integration of environmental, social and governance issues
into the classical financial analysis. However, in both cases, most studies that strive to
capture the contours of this phenomenon seem to simplify reality.
In the case of the societal approach, SRI has often been understood in its "role as
prescriber of moral value in a society in search of meaning" (Arjalies, 2010, p.3). In the
case of the economic approach, SRI marks the transition from the language of values to
the financial materiality of ESG issues and is the best way to achieve sustainable
performance (Keefe, 2007). Moreover, this way of conceiving socially responsible
investing as material to company management has helped polarize most studies around
the financial performance of responsible investment, compared to the performance of
conventional investment.
These studies, in most cases, strive to measure the SRI phenomenon by observing its
evolution in terms of performance and changes in market size. Some empirical studies,
often quantitative, have emerged in recent years that try to compare the performance of
mutual funds with those of conventional funds.
Both approaches have also had different influences on the way to understand individual
social investors. In the context of societal movement, the social investor is often likened
to investor ethics that emphasizes its values. By committing to investing in a socially
responsible manner, the social investor wants to know, above all, whether the different
investment products to be selected are in line with their values (Pivo, 2005). Thus, in
12 | P a g e
theory, the motivations of social investors are essentially underpinned by core values that
they share.
In the context of the economic approach, the social investor is seen as an investor who
integrates social and ethical criteria into the decision-making process (Kinder and
Domini, 1997). Although research in recent years tend to transcend the dichotomy
between the social and economic, the fact remains that complexity theory has rarely been
used explicitly to understand the attitudes and behaviors of social investors.
From the methodological point of view, McWilliams and Siegel (1997) argue that most
studies in the field of corporate social responsibility (including in the field of SRI) are
dotted with methodological errors because the authors attach little importance to
theoretical and methodological aspects. McWilliams and Siegel (1997) express the need
to rethink the methodological tools and data analysis in order to make the studies more
credible. In this perspective, our study is based on a theoretical framework and
methodology that emphasizes the contextual and multidimensional character of socially
responsible investment and advocates the triangulation of sources using qualitative and
quantitative methods.
2.3 Hypothesis
We argue that factors that lead people to choose SRI are both their socio-demographic
characteristics, their social values and the trade-offs they are willing to make between
social and financial returns. Individuals are also influenced by the role of the institution,
particularly through the adviser and advertising strategies. Specifically, we test the
following hypotheses:
Hypothesis 1: Although socio- demographic aspects help determine certain
characteristics of social investors, they are not, however, significant when associated
with other variables.
Unlike many studies that show, through a process of aggregating data, the importance of
demographic variables, our study relativizes the influence of socio- demographic factors
13 | P a g e
in the choices that guide individuals towards investment. All things being equal, the
socio-demographic variables alone cannot explain why some individuals choose socially
responsible investing and others did not. We include variables such as age, gender,
education level, occupation, household composition. Most of these variables were used to
study the behavior of both conventional investors (Dorn and Huberman , 2005; Bailey,
Kumar and Ng. , 2009; Graham, Harvey and Huang (2009) and social investors (Rosen
et al., 1991; Tippet and Leung, 2001; Mattersen, 2001; Bauer and Smeets, 2010a).
Hypothesis 2: Social values related to environmental, social, and governance issues
guide people's choices in SRI.
In a relatively new item, Glac (2009) attempts to answer the question of why some
investors practice SRI and others do not. The results of this study show that the context in
which responsible investment is undertaken affects the probability of commitment to
socially responsible investing and explains, in turn, that people are willing to sacrifice
performance when it comes to choosing between socially responsible funds and
conventional funds. The current context is mainly influenced by the environmental, social
and governance issues. Awareness of issues would encourage individuals to incorporate
social values into investment decision making.
Hypothesis 3: Even if they put forward their social values, social investors are still
interested in portfolio returns. The investor profile explains the level of importance given
to returns.
With this assumption, we postulate that social investors, like conventional investors, are
also attracted by financial returns. The integration of social values into decision making
does not exclude the pursuit of profit although these investors are willing to sacrifice
return to a certain percentage.
Hypothesis 4: The more the attitudes are favorable to SRI, the more investors tend to
choose SRI products.
14 | P a g e
This hypothesis explores how favorable or unfavorable attitudes may influence decisions
on socially responsible investment. Conversely, we also try to see the impact of a priori
reluctance towards socially responsible investing and how these factors could limit the
decisions of investing in SRI.
Hypothesis 5: The institution influences the choices in SRI.
- Sub-hypothesis 1: Information sources (advertising, TV, etc.) are important tools for
promoting responsible investment and influence decisions making.
- Sub-hypothesis 2: The investment advisor strongly influences investment decisions.
We test the hypothesis of the role of the institution and thus promotion strategies and the
role of advisor in SRI. As socially responsible investing is a relatively new phenomenon,
it is important to explore the extent to which promotional strategies designed by the
institution and the role played by the advisor influence individuals when choosing SRI.
Investors are indeed more likely to invest in a responsible manner if they are informed
(Barreda-Tarrazona et al., 2011). By integrating their personal values in their decisions,
social investors seek advisors who respect their choices (Statman, 2008) and familiar
with the principles of socially responsible investment.
3. METHODOLOGY
3.1 Case study
Our research focuses on the Desjardins Fund based in Quebec, Canada. Founded
December 6, 1900 by Alphonse Desjardins in Lévis, Quebec, the Mouvement Desjardins
is now one of the largest cooperative financial groups in Canada. It offers full banking
services to over 6 million members and clients. A pioneer in socially responsible
investment (SRI), Desjardins offers a range of investment products based on companies
whose practices emphasize their sense of social responsibility and respect for the
environment. Its approach to SRI is based on four main strategies: exclusionary screens,
inclusionary screens, shareholder engagement, and dialogue and / or collaboration.
15 | P a g e
As a research strategy, case study is often used as part of a study that raises questions of
"how" or “why” or when the researcher has little control over events or when it is a
contemporary phenomenon grounded in a real context (Yin, 2003). This is consistent
with our study that explores a contemporary phenomenon, that is the role of the socially
responsible investment manager.
3.2 Data generation
We used secondary data and semi-structured interviews:
3.2.1 Secondary data
Secondary data is “data collected by others, not specifically for the research question at
hand” (Cowton, 1998 (p.424), citing Stewart, 1984; Frankfort and Nachmias, 1992).
Cowton argues that “consulting secondary sources may be particularly useful in the early
stages of research for generating sensible hypotheses or for other aspects of research
development” (p.429). For researchers in business ethics, one of the most important
sources of secondary information are those collected from the companies themselves
(Cowton, 1998). In our case, secondary data is collected from Dejardins. Such
information is very important and may be considered as private data as it comes from an
organizational archive and is not publically available. (Cowton, 1998). Like Armand and
Cowton (1993) , this data allows us access to valuable information about SRI attitudes of
the public and investors (Web survey, 2008). It offers insight into the experience and
behavior of holders of Desjardins Funds (Sociéterre portfolios (2010), and Sociéterre and
Diapason unit holders (2012)). Even though using this secondary data may provoke a loss
of control (Cowton, 1998), it is very suitable for our purpose and is used as a
complement (Stewart, 1984) to other sources of data such as those collected from
interviews and the questionnaire introduced to investment managers. This approach can
be viewed as data triangulation (Jick, 1979). Using secondary data also allows us to have
access to less biased information (Cowton, 1998) and overcome some difficulties like
social desirability (Fernandes and Randall, 1992; Randall and Fernandes, 1991). This
secondary data is gathered from an online survey: Desjardins Panel (2010), a web-based
16 | P a g e
survey on perceptions relative to socially responsible investment (2008), and Desjardins
Panel (2012).
3.2.2 Interviews
Interviews are one of the most important sources of case study information (Yin, 2003).
In our study, we conduct focused-interviews (Merton, Fiske and Kendall, 1990).
Interviews are conducted in a short period and in a conversational manner (Yin, 2003,
p.90). The questions we asked concern the characteristics associated with those who
choose SRI products (demographic characteristics, socio-cultural values, attitudinal
(values based) characteristics, the role of the advisor in SRI investment and the
impediments investors are facing.
3.3 Variables, measures and analysis model
Although it strives mainly to highlight the factors associated with socially responsible
investing, three investor segments were identified for comparison:
- Segment 1: The Sociéterre portfolio holders : Sociéterre Portfolios are portfolios
of Desjardis SRI funds that select companies with a financial analysis and
evaluation based on environmental, social and governance (ESG) factors.
- Segment 2: The Diapason portfolio holders: These are the holders of traditional
investment portfolios. These portfolios provide optimal diversification in a single
transaction.
- Segment 3: Both Diapason and Sociéterre portfolios holders
These three dependent variables can be discriminated by other variables. The choice of
explanatory variables is based on the literature on socially responsible investing, the
assumptions made above, and the constraints of the questionnaire used in the Panel
Desjardins 2012. As shown in the general model of analysis (figure 1), we selected 14
variables nested in five blocks:
- Demographics: age, gender, education, occupation, household size.
17 | P a g e
- ESG issues : ESG Profile. As for ESG profile, we combined seven variables for
proposals and awarded the following scores: Strongly Agree =3, Somewhat Agree
= 1, Does Not Know = 0, Somewhat Disagree = -1and Strongly Disagree = -3.
Then, depending on the distribution of mean scores, it was determined the
following categories: Enthusiastic (2-3 points), Interested (1 to 1.86 point), Warm
(0 to 0.86 point), Reluctant (-1.86 to - 0.14 point).
- Trade-off: Investor Profile, expected annual return;
- Attitudes: Satisfaction with the product and product recommendation
- Role of the institution: information sources, product knowledge, degree of
product knowledge, investment management style.
The figure 1 presents our analysis model.
Figure 1 : General analysis model
SRI holding
0.No
1.Yes
Age
Gender
Education
Occupation
Household size
Inst
itut
ion
ESG Profile
ESG
issu
es
Investor Profile
Expected annual return
Sources of information (role of advisor)
Knowledge of the product
Level of product knowledge
Investment management style
Satisfaction for the product
Recommendation of the product
Atti
tud
es
Tra
de-
offs
18 | P a g e
3.4 Data analysis
The various analysis used (univariate, bivariate and multivariate) focus exclusively on
data from the Panel Desjardins 2012 (n = 893). This data has been weighted. We divided
the initial weight by the average in order to obtain the final weight.
We first performed a univariate analysis to determine the profile of all participants while
detecting problematic variables. Thus, for each variable, the frequency distribution or the
measure of central tendency is determined.
Then, using a bivariate tabular analysis, we determined the respective characteristics of
each segment with respect to socio-demographic variables, the ESG profile, attitudes,
trade-offs and the role of the institution . The advantage of this approach is to identify
separately, using the chi-square, variables associated with each of the three segments (p
<0.05).
Finally, the variables are included in the multivariate model to observe their effect on the
segments in the presence of each other. The logistic regression analysis was used for this
purpose with a significance level of 0.05.
The analysis of the qualitative content uses an approach of systematic classification of
coding and identification of themes or patterns (Hsieh and Shannon, 2005). Data from 10
interviews was analyzed using QDA Miner software.
4. FINDINGS
4.1 Profile of participants
The first results relate to the profile of the participants in the study. Thus, Table 2
presents the distribution of participants by portfolios holding. It shows that on a sample
of 893 participants, Diapason holders are majority (90.4% against 9.6%). The Sociéterre
portfolio holder’s are just 12.5% while the holders of two portfolios (and Diapason and
Sociéterre) are only 2.9%.
19 | P a g e
Table 2. Portfolio holding of the participants (n=893)
Portfolios N %
Sociéterre
Yes 112 12.5
No 781 87.5
Diapason
Yes 807 90.4
No 86 9.6
Sociéterre and Diapason
Yes 26 2.9
No 867 97.1
Note: The three segments are not mutually exclusive.
Source: Desjardins Panel (2012)
Table 3 presents the socio-demographic characteristics of participants in Panel
Desjardins. Their average age is 44 years old and the modal age from 35 and 44 (29.9%).
The majority are male (51.7%), have a college degree (55.2%) and work full time or part-
time (78.9%). The average household size is 2.7 members and most frequently
participants have two members in their household (33.5%).
Table 3. Socio-demographic characteristics of participants (n = 893)
Socio-demographic characteristics N %
Age
18-24 years 18 2.0
25-34 years 187 20.9
35-44 years 267 29.9
45-54 years 237 26.5
55-64 years 153 17.1
65 years and more 31 3.5
Average (continuous) 44.3 (11.3)
Gender
Female 431 48.3
Male 462 51.7
Education
None/Secondary 102 11.4
College/Profession 298 33.4
University 492 55.2
Occupation
Not working 42 4.7
Working 705 78.9
Retired 84 9.4
20 | P a g e
Other 62 6.9
Household size (persons)
1 155 17.4
2 299 33.5
3 168 18.8
4 211 23.7
5 and more 60 6.7
Average (discrete) 2.7 (1.2)
Note: For quantitative variables, the numbers in parentheses refer to the standard deviation
Source: Desjardins Panel (2012).
Table 4 shows the frequency distribution of the characteristics other than socio-
demographic.
21 | P a g e
Table 4. Values, tradeoffs, attitudes and relationships with the advisor of the
participants (n=893)
Characteristics N %
Values
ESG Profile
Reluctant 61 6.9
Warm 276 31.0
Interested 425 47.6
Enthusiastic 130 14.6
Tradeoffs
Investor Profile
Audacious 69 7.7
Dynamic 180 20.3
Balanced 392 44.0
Moderate 168 18.8
Cautious 81 9.1
Expected annual return
Less than 5% 67 7.5
Between 5 and 5.99% 169 18.9
Between 6 and 7.99% 160 18.0
8% and more 497 55.6
Average (continuous) 8.0 (9.7)
Attitudes
Satisfaction of the product
Somewhat dissatisfied 157 17.9
Somewhat satisfied 719 82.1
Would recommend the Product
Yes 190 21.3
No 703 78.7
Role of the advisor
Information Sources
By my advisor 742 85.8
By advertising, article (TV, newspapers, magazines) 21 2.4
Brochure, Pamphlet, conference 54 6.2
Through friends, acquaintances, relatives 23 2.7
By internet 25 2.9
Knowledge of the product
Did not know the product at all 556 62.2
Has already heard a little of the product 177 19.8
knows a little about the product 145 16.3
Has met an advisor 15 1.7
"Advisor was knowledgeable about the Product" l
Strongly disagree 13 1.5
Somewhat disagree 35 4.0
Somewhat agree 361 41.7
Strongly agree 458 52.8
Investment Management
Autonomous 173 19.5
Discuss with advisor and collective decision 649 73.2
Trusts his advisor 65 7.3
Note: For the expected annual return, the figure in parentheses refers to the standard deviation
Source: Desjardins Panel (2012).
22 | P a g e
The ESG profile reflects the values of participants on environmental, social and
government issues. Thus, according to the distribution points, people «interested» are
more numerous (47.6%) in the sample, followed by «warm» (31%), «enthusiastic»
(14.6%) and «reluctant» (6.9%).
As for the tradeoffs, the analysis shows that the investor profile described as "balanced"
is the most prevalent group in the survey (44%). Despite this balanced approach the
majority of participants (55.6%) expect an annual return of 8% (average) or more.
Attitudinally, participants are «somewhat satisfied» with respect to the product (82%),
even if they do not generally recommend the product to other potential investors (78.7%).
Regarding the role of the institution, there is a predominance of participants who have
heard of the product through their advisor (85.8%). Similarly, the majority of respondents
(62.2%), felt that the advisor did not know the product at all. In terms of investment
management, 72.6% prefer to discuss with the advisor and make decisions together. It
should be noted that holders of the conventional portfolio (who are the vast majority of
respondents) as well as holders of the SRI portfolio are answering these questions.
4.2 Segmentation based on bivariate analysis
As shown in Table 5, the portfolios segments are distributed differently depending on the
socio-demographic attributes of participants.
Table 5. Portfolios Holding according to socio-demographic characteristics of
participants (n = 893)
Socio-démographic Characteristics
Segments
Societerre Diapason Both
Age n.s. p<0,05 n.s.
34 years and less 35 (17.1) 175 (85.4) 5(2.4)
35-44 years 34 (12.7) 243 (91.4) 10(3.7)
45-54 years 24 (10.1) 220 (92.8) 7(3.0)
55 years ad more 19 (10.3) 168 (91.3) 4(2.2)
Gender n.s. n.s. n.s.
Female 60(13.9) 385 (89.3) 14(3.2)
23 | P a g e
Male 52(11.3) 422 (91.3) 12(2.6)
Education n.s. n.s. n.s.
None/Secondary 15(14.7) 89 (87.3) 2(2.0)
College/Profession 30(10.1) 274 (92.3) 7(2.3)
University 67(13.6) 442 (89.8) 1(3.5)
Occupation p<0,05 p<0,05 n.s.
Don’t work 4(9.5) 40 (95.2) 2(4.8)
Works 82(11.6) 644 (91.3) 21(3.0)
Retired 10(11.8) 76 (90.5) 1(1.2)
Other 16(25.8) 47 (75.8) 1(1.6)
Household size(persons) n.s. p<0,10 n.s.
1 28(18.1) 131(84.5) 4(3.2)
2 36(12.0) 272 (91.0) 9(3.0)
3 21(12.6) 151(90.4) 5(3.0)
4 19(9.0) 198 (93.8) 6(2.8)
5 and more 7(11.7) 54 (90.0) 2(3.3.)
Note: The percentages (in parentheses) are calculated within categories of independent variables, namely
the socio-demographic characteristics, to better observe their differences in the three segments. The chi-
square is used to test the significance of these differences.
Source: Desjardins Panel (2012).
The socio-demographic attributes are concentrated in the segment of the holders of the
Diapason portfolio. Age, occupation and household size are all significantly associated
with this segment. Specifically, those between 45 and 54 years old are 92.8% likely to
hold a classical portfolio , the participants who are not working are 95% likely to hold the
classical portfolio and those who have 4 children are 93.8% to hold this investment. The
females with the "college / Profession" level are more likely to hold a Diapason portfolio,
but the differences are not significant.
As for holders of a Sociéterre portfolio, only occupation is significantly associated. Thus,
people with other occupations (including education) are more likely to belong to this
group (25.8%). The females, aged 34 and younger, with "none / secondary" level and
with one member in the household are more likely to hold a Sociéterre portfolio, but the
differences are not significant.
For the holders of the two portfolios, no attribute is able to characterize them
significantly.
24 | P a g e
The observation made with regard to the socio-demographic variables also applies to the
other variables in that they characterize differently the holders of socially responsible
investment portfolios and holders of traditional portfolios. However, many of these
variables are significant for the two portfolios (Table 6).
Table 6. Holding portfolios based on the values, trade-offs, attitudes and
relationships with the advisor of in participants (n = 893)
Characteristics Societerre Diapason Both
Values
ESG Profile p<0,01 p<0,01 p<0,10
Reluctant 1(1.6) 61(100) 1 (1.6)
Warm 9(3.2) 271(98.2) 4(1.4)
Interested 58(13.6) 380(89.4) 13(3.1)
Enthusiastic 44(33.8) 95(72.5) 8(6.2)
Trade-offs
Investor Profile n.s. n.s. n.s.
Audacious 9(13.0) 62(89.9) 2(2.9)
Dynamic 26(14.4) 162(90.0) 8(4.4)
Balanced 43(11.0) 361(92.1) 12(3.1)
Moderate 21(12.6) 149(89.4) 3(1.8)
Cautious 12(14.8) 70(86.4) 1(1.2)
Expected annual return n.s. n.s. n.s.
Less than 8% 46(11.6) 360(90.9) 10(2.5)
8% and more 67(13.5) 447(89.9) 16(3.2)
Attitudes
Satisfaction of the product p<0,01 p<0,01 n.s.
Somewhat dissatisfied 7(4.5) 153(97.5) 3(1.9)
Somewhat satisfied 101(14.0) 641(89.2) 23(3.2)
Recommendation of the product p<0,01 p<0,01 n.s.
Yes 190 153(80.5) 6(3.2)
No 703 654(93.0) 20(2.8)
Role of advisor
Has heard of the product p<0,01 p<0,01 p<0,01
By my advisor 70(9.4) 688(92.6) 16(2.2)
By advertising, article (TV, newspapers, magazines) 12(57.1) 11(52.4) 2(9.5)
By brochure, conference 13(24.1) 46(85.2) 5(9.3)
Through friends, acquaintances, relatives 2(8.7) 22(95.7) 1(4.3
By internet 10(41.7) 16(64.0) 2(8.0)
Product Knowledge p<0,01 p<0,01 n.s.
Did not know the product at all 47(8,5) 520(93.7) 11(2.0)
Has heard of the product a little 23(13.1) 1160(90.4) 7(4.0)
Did know a little or was familiar with the product 37(25.5) 115(79.3) 7(4.8)
Level of product knowledge p<0,001 p<0,001 n.s.
At variance 13 (27.1) 36(75.0) 1(2.1)
In agreement 94 (11.5) 750(91.5) 24(2.9)
Investment Management p<0,01 p<0,05 n.s.
Autonomous 35(20.2) 146(84.4) 8(4.6)
Discuss with Advisor and make a collective decision 70(10.8) 596(92.0) 18(2.8)
Trust his advisor 6(9.4) 58(90.6) 0(0.0)
25 | P a g e
Note: The percentages (in parentheses) are calculated within categories of independent variables, namely
the socio-demographic characteristics, to better observe their differences in the three segments. The chi-
square is used to test the significance of these differences.
Source: Desjardins Panel (2012).
The same variables significantly characterize Sociéterre portfolio holders and Diapason
portfolio holders: ESG profile, the satisfaction with the product, having recommended the
product, the sources of information with regard to product, product knowledge, the level
of product knowledge, investment management style. However, these variables
characterize differently the segments.
As for the ESG profile, those who are <<enthusiastic>> about ESG as opposed to
reluctant or weak on ESG tend to hold a Sociéterre portfolio (33.8%), while those who
are only warm to ESG tend to hold a Diapason portfolio (98.2%)These results indicate an
important difference between the characteristics of the SRI portfolio holders and those of
traditional portfolios. In more concrete terms, the higher the awareness of environmental,
social and governance issues, the more they tend to invest responsibly. ESG factors are
determining factors in socially responsible investment and also highlight the importance
of the context.
"I think it's the awareness of ESG issues. The first factor, which is important, it is
the environment. Everything starts from there. Then, it grows with the social
issues and governance scandals of course that have occurred in recent years. So it
widens but basically it is an awareness of might happen in the future. Basically,
it’s the desire to possibly see a difference. So this is a movement that is more or
less old but at the same time there is still much work to do in order to have the
wind in the sails. Well, anyway, there is awareness at that level. "(Portfolio
manager, Qualitative interviews, 2012)
Asked whether the awareness on sustainable development issues are crucial, he adds:
"Yes but I will put it more in the context of the media. For a long time we did not
talk about that but I think now with the advent of special media, the prominence
of Twitter, Facebook and others, information is live and continuous. I think it's
more of that side than the stakeholder awareness. So they hear more about it,
therefore, they feel that this is a problem at home. It does not happen just in
Europe, Japan or elsewhere. It happens right away and so it makes them tick. "
26 | P a g e
Another participant, a product manager, adds:
"I will say is that we have known scandals in recent years mainly at the leaders
whose pockets are full of money. So it is these aspects of governance. For
example, Couche Tard, here in Quebec, at the union level or Walmart or Nike in
recent years with child labor or the debate raging in all aspects related to the
environment. I think of shale gas in Quebec. It's a bit all that. As soon as it hits the
comfort of the people or their lives, they react." (Qualitative interviews, 2012).
People who have heard of product through advertising or articles (TV, newspapers,
journals) are more likely to hold a portfolio Sociéterre (57.1%). People who have heard
of the product through friends, acquaintances or relatives are more likely to hold a
Diapason portfolio (95.7%). For those who hold the two portfolios, they have mostly
heard about the product through advertising or articles (9.5).
People who feel that the advisor knew a little about the Societerre product are more likely
to hold a Sociéterre portfolio (25.5%). Though the overwhelming number of people in the
survey held the Diapason portfolios regardless of the level of knowledge of the advisor.
These results show the importance of the need for institutions to develop strategies to
promote SRI products. Participants in the interviews have, in turn, emphasized the key
role of promoting SRI products:
"Certainly. It's like advertising. But for now, it really is by advertising. The more
we talk the more people will be interested in that. But after that, it must
demonstrate that it works. We think it works but it has not been proven yet. "(A
manager)
"Yes, but I always told my colleagues that SRI is not sold, it is bought. In other
words, it's more people who request that, than advisors or institutions will
promote these products. It really has to come from those people. Institutions still
have work to do to show that it exists but it's really a personal decision. "(A
product development manager).
"But those who do not know, it behooves us to make them know through
advertising or in newspapers to convince them that it exists. The other thing, for
example, this can be the slogan: it's 50,000 people who invested in ethical funds,
so it can make a difference. Unity is strength. "(Financial Planner 2).
27 | P a g e
However, if it is true that promotion strategies can help influence people's choices in SRI,
it is none the less true that they are insufficient to convince the customer. The role of the
advisor is also important mostly as part of an approach that emphasizes face-to-face.
However, this assumes that the advisor himself knows SRI products:
"Of course, he (the advisor), is there to understand the customer. But the problem
is that the advisor must also understand the product, which is not always the case.
Basically, it takes a well-trained advisor as well as a good understanding of the
customer. For now, I do not know if this is the case. (...) But actually, in its role,
the influence of the advisor on SRI is certainly important. And the better advisors
will be trained, the better investors will understand the issues and SRI will win”
(A portfolio manager).
People with a style of investment management "autonomous" are more likely to hold a
Sociéterre portfolio (20.2%). In contrast, people who talk to the advisor and make
decisions together are more likely to hold a portfolio Diapason (92%). The above
explanations on the differences between the holders of SRI portfolios and those of
traditional investment portfolios can be useful to understand the investment management
style. The fact that holders of SRI portfolios are younger and educated may help explain
this difference. In other words, compared to traditional portfolio holders, they may be
quicker to use the Internet and other means to find the information that enables them to
manage their investments independently.
Basically, only the ESG profile and information sources are able to significantly
characterize the retention of two portfolios. All variables relative to values, attitudes and
the role of the advisor were significantly associated with holding the Sociéterre portfolio,
on the one hand, and holding a Diapason portfolio, on the other hand.
No «trade-off» variable is significantly associated with one of the three segments.
Regarding the expected annual return, it is the values categorization of the continuous
variable values which canceled its explanatory power. Bivariate logistic regression, with
the continuous variable, indicates, in fact, a significant relationship.
28 | P a g e
However, let's note that participants who expected an annual return of 8% and above
outnumber respectively in the three segments. This could raise questions if we take into
account the issue of performance of SRI portfolios. One might well argue that social
investors can be characterized with respect to performance by the confidence that their
portfolio, despite other preferences , will outperform.
The use of certain variables arbitration was somewhat limited by the fact that the 2012
data either included a quite high percentage of missing cases or did not address these
variables. To illustrate, the 2012 data did not address explicitly the risk aversion and the
percentage devoted to SRI in future investments of investors. Moreover, the choice
between SRI and conventional investment depending on whether the performance is
equal, lesser or greater could not be analyzed because of the important missing cases.
To address these limitations, we used some data from the 2010 Panel Desjardins. This
Panel concerned only SRI portfolio holders and the data were submitted neither to
bivariate analysis nor to multivariate analysis.
Table 7 addresses the choice between SRI and conventional investment depending on the
level of performance. The question is phrased this way: "The Balanced Sociéterre
Portfolio had a return of 19.94% over the past year and 14.89% since inception. Now
imagine that you must make a choice between an investment of this type (SRI) and a
more conventional investment, which would you choose if ... Both yields were equal or
SRI is less than 1%, 3%, 5% or 10%.”
Table 7: Choice of the type of investment based on the level of performance
Level of performance Type of investment
SRI Classical investment Don't Know
Equal (n=142) 99,6 0 0,4
1% moins élevé (n= 142 85,2 5,0 9,8
3% moins élevé (n=142 58,0 21,8 20,1
5% moins élevé (n+142) 34,4 33,7 31,8
10% moins élevé (n=142) 17,3 43,4 39,4
Source : Desjardins Panel, 2010
29 | P a g e
In the case of equal return, almost all Sociéterre investors choose the SRI option. Similarly
more than 85.2% would choose to SRI with a yield of 1% lower than that of the classical
investment. We notice that 17% of investors would choose SRI even with a yield of 10%
lower than that of the classical investment.
However, it should be noted that the percentage of respondents who reported "Don't
Know" increases gradually as the difference between the yields increases. It rose from
0.4% in the case where yields were equal to 39.4% assuming a yield of SRI 10% lower
than that of conventional investment. The percentage of investors who chose SRI
decreases depending on whether the difference between the performance of SRI and that
of the conventional investment increases.
These results lead to several important conclusions:
- The heterogeneity of social investors in terms of expectations for return.
- A category of investors more inclined to use economic incentives and another to
social motives (Smith and Bauer, 2010a)
- A class of investors with conflicting incentives, or facing a dilemma that leads to
difficulties in making choices in terms of expectations between economic and
social issues.
Most participants in the qualitative study also believe that return is important for social
investors; although this does not exclude that they incorporate social values into their
investment decisions:
"I would say that this is not a determining factor in the sense that people don't
choose SRI in order to make a profit but they won't choose SRI if they are not
able to achieve the same gains as with traditional investment. So they are not
necessarily ready to say "we will sacrifice performance for SRI". There is a
threshold at some point. There are limits. It's not the pursuit of profit per se, but
more, yes it is true insofar as it is not too much. "(Qualitative interviews, 2012)
"It's profit to 95%. I manage 1000 clients; there are at least 950 for profit. For the
other 50, it is the environment and the social. The 5% is mainly trade unions and
30 | P a g e
religious communities and foundations who want to talk about social concerns.
And they are just 5%. "(Qualitative interviews, 2012).
"SRI is not necessarily for everyone. There are «hard» investors who wish the
investments were 100% responsible. So, it's the case of an Imam who would not
have oil companies in environmental funds such as Desjardins. But this is really
pure. This is what I call the Greenpeace, the pure. Otherwise, profit is still a major
factor for many people. When I talk about SRI funds, it is not uncommon for them
to ask us if it pays, there is immediately a concern about return, it must make
money "(Qualitative interviews, 2012).
"I think it's a whole. But at the same time, if you have to choose between two
products: the first one is a SRI product and the second is not. But there's one of
the product which is above 10%. I'll take the one which makes more than 10%. So
there is still a profit motive within (...). What we are trying to prove now is that
basically, there is no penalty in terms of return to invest in socially responsible
manner. There are studies that show this but it's not a trend there. So when we
invest, there is a profit motive in it. There are other things. Basically, we must
now evaluate all but the evaluation is usually done in the short term. There is a
change in mentality. Then, we must perhaps go through a change in attitude to
make it over the long term.” (Qualitative interviews, 2012)
But they recognize the complexities surrounding the investment, especially the socially
responsible investment:
"People want to invest ... When people invest, it is not just profit and social. This is
not a binary world. It is a multi-sectoral world. Just making the link between profit
and social would be an oversimplification. People want to invest in bonds, equities,
stocks in Canada, shares in the USA and in some emerging countries. They want to
buy in Canada but when they buy in Canada, they want to buy oil, gold. They want
to buy the dollar, grocery stores; they want to buy phones in companies in which
they choose. They want companies to have companies they know as well companies
they don't know. They want profitable companies and unprofitable companies. There
is no correlation between profitability and social awareness. You know, the
companies which are less profitable are sometimes the most contemptuous of social
norms, and also the most profitable or very profitable can be disrespectful. There is
no relationship between profit and social respect. These are two individual questions
and the first does not preclude the second. They are two independent variables. "
(Qualitative interviews, 2012)
31 | P a g e
4.3 Segmentation based on multivariate analysis
Table 8 presents the results of the multivariate hierarchical regression of Sociéterre
portfolios holding.
Table 8. Hierarchical logistic regression of Sociéterre portfolio holding among
participants (n = 112)
Characteritics Block 1 Block 2 Block 3 Block 4 Block 5
Socio-demographic characteristics
Age -.01 -.02 -.01 -.01 .00
Gender
Female 0 0 0 0 0
Male -.08 -.06 .12 .08 -.19
Education .13 .05 .12 .11 .06
Occupation
Is not working 0 0 0 0 0
Is working .17 .50 .68 .81 1.29
Retired .52 .93 .54 .45 .63
Other .83 .85 1.15 1.27 1.42
Household size -.27* -.23 -.17 -.17 -.12
Values
ESG Profile *** *** *** ***
Reluctant 0 0 0 0
Warm 1.73 1.58 1.46 1.32
Interested 2.95 2.75 2.72 2.71
Enthusiastic 4.25* 4.18* 4.01 4.01
Trade-off
Investor Profile
Audacious 0 0 0
Dynamic .26 .49 .93
Balanced .30 .44 .98
Moderate -.18 .11 .63
Cautious -.46 -.14 .50
Expected annual return .05*** .05*** .05**
Attitudes
Satisfaction of the product .12 .19
Recommendation of the product
No 0 0
Yes .76* .51
Role of the advisor
Heard about the product *
By my advisor 0
Through advertising, article 2.13*
Through a brochure, leaflet .16
By relatives -1.82
Via internet 1.79*
Product knowledge
Did not know at all 0
Had ever heard -.20
Knew a little bit or well .49
Level of knowledge -.83**
32 | P a g e
Investment Management
Autonomous 0
Discuss with the advisor -1.11
Trust the advisor -18.23
N 543 543 543 543 542
R-Two (Nagelkerke) % 04.2 17.9 23.1 25.6 39.5
Clearance rate % 89.1 88.9 89.6 90.1 91.8
Note: The numbers refer to regression coefficients, * p <0.05, ** p <0.01, *** p <0.001
Source: Desjardins Panel (2012).
In step 1, only one socio-demographic variable is significant in the presence of other
variables: household size (p <0.05). Whenever the household size increases by one
member, the holding of a Sociéterre portfolio decreases by 0.27. In other words, the
probability of holding this type of portfolio increases in households with fewer members.
Block 1 explained 4.2% of the variation in holding a portfolio Sociéterre, with a
clearance rate of 89.1%. If a respondent has the characteristics described in the model, it
predicts will be part of the group he belongs in 89.1% of cases.
The addition of block 2 in the regression equation provides a significant improvement
since the model increased the explained variance to 17.9%. Thus, the ESG profile is
significantly associated with holding a portfolio Sociéterre controlling for the effect of
socio-demographic variables (p <0.001). 'Enthusiastic' are more likely to invest in a
portfolio Sociéterre than 'reluctant'. As for the 'interested' and 'warm', they do not differ
significantly from 'reluctant'. However, household size is more significant in the presence
of ESG profile. In the third step, the introduction of variables of type "arbitrage"
increases the strength of association of the model since it increases the proportion of
variance explained to 23.1%. However, among the two variables entered, only the
expected return is significant in the presence of other variables (p <0.001). The higher the
expected return increases, respondents tend to invest in a portfolio Sociéterre: a one-point
increase in % return is associated with an increase of 0.05 in the possession of such
portfolio. The ESG profile is still significant in general.
The addition of Block 4 consists of variables of type "attitudes", slightly increased the
proportion of variance explained up to 25.6%. Participants who have already
33 | P a g e
recommended the product are more likely to hold a portfolio Sociéterre (p <0.05). All
things being equal, the satisfaction of the product is not significantly associated with the
possession of such portfolio. ESG profile in general and the expected returns are still
significant.
The recommendation of the product is no longer significant in the presence of variables
related to the role of advisor (p> 0.05). Presumably this is because those respondents who
recommended are those who use the Internet or advertising and those who disagree with
the fact that the advisor was very familiar with the product.
Our findings suggest that ESG profile in general and the expected returns are still
significant.
Table 9 presents the results of the hierarchical regression of the retention of Diapason
portfolio holding.
Table 9. Hierarchical logistic regression of Diapason portfolio holding (n = 807)
Characteristics Model 1 Model 2 Model 3 Model 4 Model 5
Socio-demo. Characteristics
Age -.02 -.03 .02 .02 .01
Gender
Female 0 0 0 0 0
Male .23 .24 .04 ,04 .28
Education -.13 -.05 -.12 -.12 -.05
Occupation
Is not working 0 0 0 0 0
Is working -.36 -.73 -1.12 -1.12 -1.85
Retired -1.04 -1.54 -.83 -.83 -1.39
Other -1.17 -1.26 -1.68 -1.68 -2,06
Household size .33* .29* .24 .24 .19
Values
ESG Profile *** *** *** ***
Reluctant 0 0 0 0
Warm -17.32 -17.02 -17.02 -16.70
Interested -18.63 -18.35 -18.35 -18.18
Enthusiastic -20.04 -19.70 -19.70 -19.60
Trade-offs
Investor Profile
Audacious 0 0 0
Dynamic -.18 -.19 -.71
Balanced -.45 -.45 -1.17
Moderate -.50 -.50 -1.22
Cautious -.30 -.30 -1.07
Expected annual return -.05*** -.05*** -.05***
Attitudes
34 | P a g e
Satisfaction of the product -.18 -.23
Recommendation of the product
No 0 0
Yes -1.01** -.73
Role of the advisor
Heard about the product *
By my advisor 0
Through advertising, article -2.08*
Through brochure, leaflet .76
By relatives 1,77
Via internet -1.70*
Product knowledge
Did not know at all 0
Had ever heard about the product .27
Knew a little or well -.70
Level of knowledge .90***
Investment Management
Autonomous 0
Discuss with the advisor .16
Trust the advisor 17.89
N 543 543 543 543 542
R-deux (Nagelkerke) % 06.2 20.4 26.2 30.1 45.2
Clearance rate % 91.5 91.0 92.0 92.2 94.2
Note: Numbers refer to regression coefficients, * p <0.05, ** p <0.01, *** p <0.001
Source: Desjardins Panel (2012).
In step 1, only a socio-demographic variable is significant in the presence of other
variables: household size (p <0.05). Whenever the household size increases by one
member, the chance to hold a portfolio Diapason increases of 0.33 (instead of decreasing
as in the case of Sociéterre portfolio). Block 1 explains 6.2% of the variation in holding a
Diapason portfolio, with a clearance rate of 91.5%.
The addition of block 2 in the regression equation provides a significant improvement
since the model increased the explained variance to 20.4%. Thus, the ESG profile is
significantly associated with holding a portfolio Diapason controlling the effect of socio-
demographic variables (p <0.001). The 'enthusiastic', 'interested', and 'warm' are less
likely to invest in a portfolio Diapason than the 'reluctant' on ESG issues. Except that
these differences are not significant (p> 0.05). Household size is still significant in the
presence of ESG profile (p <0.05).
35 | P a g e
In the third step, the introduction of type variables "trade-offs" increases the strength of
association of the model since it increases the proportion of variance explained to 26.2%.
However, among the two variables entered, only the expected return is significant in the
presence of other variables (p <0.001). The ESG is still significant profile in general.
The addition of Block 4 consisting of variables of type "attitudes", slightly increased the
proportion of variance explained to 30.1%. Participants who have already recommended
the product are less likely to hold a Diapason portfolio (p <0.01). All things being equal,
the satisfaction of the product is not significantly associated with the possession of such
portfolio. ESG profile in general and the expected returns are still significant.
At the fifth step, the introduction of variables relating to the role of adviser substantially
increases the strength of association of the model since it increases the proportion of
variance explained to 45.2%, which is widely acceptable in the social sciences. The
source of information, one of the four newly introduced variables, is significantly
associated with holding a portfolio in tune with the presence of other variables (p <0.05).
Respondents who heard of the product by advertising and article are less likely to hold a
portfolio than respondents who have contacted their advisor (coef = -2.08). Similarly,
respondents who have heard of the product over the Internet are more likely to hold a
Sociéterre portfolio than respondents who have contacted their advisor (coef = -1.70).
Moreover, the degree of product knowledge by advisor is significant (p <0.001). The
recommendation of the product is no longer significant in the presence of variables
related to the role of advisor (p> 0.05). Presumably this is because the respondents who
did not recommend the product are also those who are informed by their advisor and who
are in agreement with the fact that the counselor was very familiar with the product.
The ESG profile in general and the expected returns are still significant. The ESG profile
in general and the expected returns are still significant. Regarding more specifically the
ESG profile, this is consistent with the motivations that incite or could incite participants
to invest responsibly:
36 | P a g e
"Because, I want to invest my money in a responsible fund. I would be really
unfortunate that my money be used to make weapons or cigarettes, for example "
(Panel Desjardins, Open-ended questions, 2010)
"I wish my investments were a reflection of my values." (Panel Desjardins,
Open-ended questions, 2010)
"Because it matches my personal values" (Panel Desjardins, Open-ended
questions, 2010)
"To encourage companies that manage their business responsibly, ethically and
who is an environmental concern, and not to encourage others ... I'm like "fair
trade" ... ;-) " (Panel Desjardins, Open-ended questions, 2010)
"This portfolio represents my ethical and environmental values" (Panel
Desjardins, Open-ended questions, 2010)
"I wanted my money be invested in companies that look beyond just the next
quarter's results, who see the future of the planet or people is important too."
(Panel Desjardins, Open-ended questions, 2010)
"I like how ethical and environmentally responsible" (Panel Desjardins, Open-
ended questions, 2010)
"I am only Interested in investing in funds That Have a socially responsible
profile." (Panel Desjardins, Open-ended questions, 2010)
"I wanted to invest in the Environment Fund, which I found myself doing research
on the Desjardins Web site and that met my personal criteria in terms of ethics
and respect for the environment. However, after meeting with my advisor, we
realized that this background does not fit my investment profile. She therefore
suggested a portfolio instead Sociéterre Environment Fund, and I invested in this
portfolio. " (Panel Desjardins, Open-ended questions, 2010)
"Because I'm tired that large companies and particularly their leaders, being
amazed by the pockets without regard for the community." (Panel Desjardins,
Open-ended questions, 2010)
"I want to place some of my assets as a gesture by social, environmental and
solidarity. I want the fund managers do pressures for companies to make ethical
choices, environmental and socially. " (Panel Desjardins, Open-ended questions,
2010).
"I like its ethical and environmental aspects" (Panel Desjardins, Open-ended
questions, 2010)
37 | P a g e
"I am only interested in investing in funds that have a socially responsible
profile." (Panel Desjardins, Open-ended questions, 2010)
"I wanted to invest in the Environment Fund, which I found myself doing research
on the Desjardins Web site and that met my personal criteria in terms of ethics
and respect for the environment. However, after meeting with my advisor, we
realized that this background does not fit my investment profile. She, therefore
suggested a Sociéterre portfolio instead of Environment Fund, and I invested in
this portfolio. " (Panel Desjardins, Open-ended questions, 2010)
"Because I'm tired those large companies and particularly their leaders are amazed
by their pockets without regard for the community." (Panel Desjardins, Open-
ended questions, 2010)
"I want to place some of my assets as a gesture for social, environmental and
solidarity. I want the fund managers do pressures for companies to make ethical
environmental and social choices. " (Panel Desjardins, Open-ended questions,
2010)
Our analysis led to the establishment of a parsimonious model that incorporates only the
significant variables. (Table 10)
Table 10. Parsimonious logistic regression for the portfolios Diapason Sociéterre
holding among participants (n = 893)
Characteristics Societerre Diapason
ESG Profile *** ***
Reluctant 0 0
Warm 1.57 -18.02
Interested 2.87 -19.38
Enthusiastic 4.20(66.76)* -20.86
Expected annual return .05(1.05)*** -.05(.95)***
Heard about the product *** ***
By my advisor 0 0
By advertising, article 2.12(8.34)** -2.15(.12)**
Through brochure, leaflet .44 .32
By relatives -.33 .57
Via internet 2.10(8.17)*** -2.12(.12)***
Level of knowledge -.78(0.46)*** .91(2.49)***
N 553 552
R-deux (Nagelkerke) % 31.6 25.9
Clearance rate % 90.8 93.1
Note: Numbers refer to regression coefficients, and odds ratios in parentheses, * p <0.05, ** p <0.01, *** p
<0.001
Source: Desjardins Panel (2012).
38 | P a g e
People enthusiastic about ESG are 66 times more likely to hold a portfolio Sociéterre
those reluctant about ESG.
Respondents who heard of the product by advertising and news article are 8 times more
likely to hold a Sociéterre portfolio than respondents who contacted their advisor.
Similarly, respondents who have heard of the product via Internet are eight (8) times
more likely to hold a portfolio Sociéterre than the respondents who have contacted their
advisor.
Respondents who strongly agree with the statement that the advisor was very familiar
with the product are two times (1/0.46) more likely to hold a Diapason portfolio than
respondents who somewhat agree.
5. DISCUSSION
5.1 Less structural socio-demographic characteristics and attitudes
The socio-demographic factors remain important in explaining certain behaviors and
attitudes of social investors. To illustrate, we stated that the fact that investors are
younger and educated would explain, on one hand, their high degree of awareness
towards ESG issues and, on the other hand, their autonomous style of management
investment and the fact that they most frequently use advertising and the Internet as
sources of information on socially responsible investment.
These findings confirm those of many studies on socio-demographic characteristics of
social investors, compared to conventional investors. Research by Rosen et al. (1991) and
Tippet and Leung (2001) indicate that, compared to conventional investors, social
investors are younger with a higher level of education. In the same vein, the results of
research conducted by Mattersen (2001) conclude that 85% of those aged 25-39,
compared to 72% of those aged between 40 and 59 declare that they invest ethically.
Being young and having a high level of education have a positive impact on awareness of
environmental and social issues and would, therefore, be an incentive to invest
responsibly. Hayes (2001) also found that people aged between 18 and 34 are most
prominent in regard to environmental concerns, compared to those older.
39 | P a g e
Although our research also finds that those with "no / secondary" education (14.7%) tend
to hold a socially responsible investment portfolio, it should be noted that those with
university level are also a significant proportion (13.6%). With respect to gender, our
research is also consistent with the findings of some studies such as Tippet and Leung
(2001) that lead to the same conclusion. Women seem more ready to invest in a
responsible manner than men.
While socio-demographic characteristics may allow us to compare social investors with
conventional investors in determining their respective characteristics, by themselves they
cannot explain why investors choose SRI products. No socio-demographic variable is
indeed significant when associated with other variables. This confirms our first
hypothesis.
5.2 The importance of social values and financial returns
5.2.1 ESG issues
The ESG profile generally remains significant both as part of the hierarchical logistic
regression applied to the holders of socially responsible investment portfolios (portfolios
Societerre) and with respect to the analysis applied to the holders of traditional
investment portfolio (Diapason Portfolios) . The same finding applies as part of the
parsimonious model. However, it is worth noting a significant difference in the meaning
of ESG factors:
- Enthusiastic are more inclined to invest in a Sociéterre portfolio than reluctant.
- The enthusiastic, interested and the warm are less likely to invest in a Diapason
portfolio than reluctant.
- Enthusiastic are 66 times more likely to hold a portfolio Sociéterre than the
reluctant.
All things being equal, this shows that ESG issues are strongly associated with socially
responsible portfolio holding. In other words, environmental and governance concerns
and social values are important factors that influence the decisions of social investors.
40 | P a g e
These results validate the hypothesis that indicates that the ESG concerns and social
values of social investors influence socially responsible investment decisions and are well
in line with previous studies (McLachlan and Gardner, 2004, Bell, 2001) showing that the
ethical and social issues are crucial in the choices focused on SRI. However, it is
important to note that the operation of selecting ESG issues as particularly important in
terms of investment decision (McLachlan and Gardner, 2004) is not sufficient to explain
why these factors are crucial in the choice of investment decision. The concepts of
"attitude-Behaviour Gap 'or' values-action gap" developed by Young et al. (2010) are
important for understanding this discrepancy. These authors point out in their study that
30% of consumers say they are concerned about environmental issues but are struggling
to translate them into purchasing decision. In the case of our study, ESG concerns were
already translated into purchasing decisions since the segment of Sociéterre portfolio
holders consists only of individuals who already invest responsibly. This means that they
are all, to varying degrees, concerned about the environmental, social and governance
issues.
5.2.2 The expected return
The expected return is a significant variable with both SRI portfolio holders and
traditional investment portfolios holders. However, as noted above, it is at the holders of
SRI portfolios, given the complex nature of SRI where facts and emotions can be
intertwined, where conflicting drivers are evident. The fact that this variable is significant
shows, first, that social investors still care about returns and, secondly, that despite a
priori reluctance, they remain convinced that their portfolios will perform as much or
more than traditional portfolios.
The fact that both SRI portfolios holders and conventional portfolio holders expect a
return of 8% or more shows that social investors highlight economic motivations in
addition to social values. This also validates our hypothesis and is consistent with the
findings of some of the precedent studies such as Kennedy (2001). However, like Bauer
and Smeets (2010a), we were unable to determine which category of investors seems
more attracted by economic motives than others. Moreover, the decline in the percentage
41 | P a g e
of investors beyond a certain rate of return between SRI and the conventional investment
shows the tough choices and sometimes conflicting motivations that exist between the
economic and financial aspects.
5.3 The role of the institution
The important role of the institution is illustrated through the "information sources" and
"knowledge level" in SRI variables. Thus the fact of having heard of the product by
advertising/ article or Internet increases the chance to hold a Societerre portfolio.
These results show the importance of strategies to promote SRI using advertising and the
Internet. The fact that the majority of holders of SRI portfolios are young and have more
or less high education levels explains the predominance of the use of advertising and
Internet as sources of information. Another explanation could be that as these portfolio
holders belong in their majority, to the "enthusiastic ESG" profile and have an
independent management style, thus explaining why they are less inclined to contact
advisors as part of their investment management.
However, the most notable fact is in the degree of knowledge of the advisor in SRI. The
results show that respondents who strongly agree with the statement that the advisor was
very familiar with the product are less likely to hold a Sociéterre portfolio than
respondents who somewhat agree. This calls into question the knowledge of the advisors
in SRI. At this level, our sub-hypothesis was invalidated because our predictions were
based on the assumption that the role of the advisor was important because of its
knowledge about socially responsible investing. Nevertheless, some studies have shown
the influence of information and communication in investment decisions in socially
responsible investment (Barreda-Tarrazona et al. (2011) and the role of advisor (Statman,
2008). Moreover, Grinblatt and Keloharju (2001) went further by showing the importance
of culture, language and distance in investment decisions.
42 | P a g e
6. CONCLUSION
6.1 Implications
Our study resulted in the identification of several factors associated with socially
responsible investing. Three are most significant, ESG issues, returns and the role of the
institution. These results have several theoretical and practical implications.
From the theoretical point of view, the association between several factors and socially
responsible investment further demonstrates the complexity surrounding this
phenomenon. The feature of SRI, as argued by Statman (2008), is the mix of utilitarian
nature factors (performance, risk, liquidity, taxes, etc.) with expressive nature factors
(patriotism, character social prestige) of this type of investment. Social investors derive
their inspiration from several sources such as family, religion, knowledge and experience
(Statman, 2008). The investment decision in SRI thus depends on the motivations of the
individual, their beliefs, their goals, their desires, their dreams but also the socio-cultural
context. From this perspective, we believe that research on individual social investors
should assume that investors are 'individuals in situations' to parody Jean-Paul Sartre,
who superimpose multiple identities. Furthermore, in addition to triangulating sources
and methods, they should combine meaning to measure the practical with the expressive
and above all, take into account the heterogeneous and unpredictable nature of
individuals and groups.
From a practical standpoint, our research has several implications, including on the
promotion strategies of SRI.
First, the fact that socio-demographic factors, while helping to explain certain
characteristics of individual investors are not significant in the presence of other
variables, challenge segmentation practices often being experienced in modern
organizations. While one needs segmentation to better target the market, it remains true
that the practice of segmentation must remain flexible and open, diverse, customized and
placed in a wider context. For this, we must break with simplistic approaches, crossing
43 | P a g e
demographic, generational membership, etc. with the social values of individuals, the
trade-offs they operate in, and their motivations.
Secondly, the fact that social investors seek profit and want their social values to be taken
into account also implies new approaches to strategies to promote SRI. These new
approaches, while helping combat reluctance and prejudices, should combine meaning
and values with financial returns.
Finally, increasing the role of the institution in the development of SRI would help give
more visibility to this phenomenon. Beyond promotion strategies, it's important to
contribute to education in responsible investment both for investors themselves, namely
in the areas of shareholder engagement, and advisers, particularly in terms of principles
knowledge of socially responsible investment and integration of social values in
approaching customers.
6.2 Limitations and research avenues
Our research has a number of limitations. Apart from the number of missing cases in
some variables and categories of variables, variables relative to "trade-offs" such as risk,
the percentage that investors (both conventional and social) would like to focus on their
future investments were not highlighted as part of this work. Also, the segment of
investors holding the two portfolios was often left unexamined because of the very low
number of participants. Thus, it’s important to further understand the factors influencing
the choices of this class of investors ( i.e. those investing in both conventional and
socially responsible investment) to contribute to a deeper understanding of the
phenomenon of SRI.
As socially responsible investment has no universal principles (Cummings, 2000;
Sparkes, 2001), it would be interesting to explore how ESG issues influence the
dynamics of responsible investment depending on the regions, culture, level of economic
development etc. Such research might address the particular socio-political and
environmental influences that prompt individuals to invest responsibly. Finally, in terms
of marketing strategy, it would be appropriate to explore how the integration of ESG
44 | P a g e
factors in financial decisions favors the emergence of new approaches and marketing
strategies based on social values and economic returns to reflect functional, social and
emotional motivations.
45 | P a g e
REFERENCES
Anand, P. and Cowton, C. (1993).The Ethical Investor: Exploring Dimensions of Investment
Behaviour. Journal of Economic Psychology, 14, 377–385.
Arjalies, D.L. (2010). Qu’est-ce que l’investissement Socialement Responsable. Ecole
Polytechnique, CNRS, Cahier no 2010-11.
Bailey, W., Kumar, A. and Ng, D.T. (2009). Behavioral Biases and Mutual Fund Clienteles.,
Working Paper
Barber, Brad M. and Odean, T.(2001). Boys will be Boys. Quarterly Journal of Economics, 116,
261-291
Barreda-Tarrazona, I., Matallın-Saéz,J.C; Balaguer-Franch, M.R. (2011). Measuring Investors’
Socially Responsible Preferences in Mutual Funds. Journal of Business Ethics, (103), 305–330
Bauer, R., & Smeets, P. (2010a). Social Values and Mutual Fund Clienteles. Unpublished
Working Paper, UNPRI
Bauer, R., & Smeets, P. (2010b). Some Men Invest Like Women - The Influence of Social Values
on Investment Decisions and Investor Loyalty. Unpublished Working paper
Bell, A.(2001). What if Clients want Funds that Screen for Cruelty to Animals?. National
Underwriter, 105(39), 12–13.
Bollen, Nicolas P.B. (2007).Mutual Fund Attributes and Investor Behavior. Journal of Financial
and Quantitative Analysis, 42, 683-708
Boulstridge, E. And Carrigan, M. (2000). Do Consumers Really Care about Corporate
Responsibility? Highlighting the Consumer Attitude-Behaviour Gap. Journal of Communication
Management, 4(4), 355-68.
Cowton, J.C. (1998). The Use of Secondary Data in Business Ethics Research, Journal of
Business Ethics, 17, 423–434.
Cullis, J. G., Lewis, A., Winnett, A. (1992). Paying to be Good? U.K. Ethical Investments”,
Kyklos, 45(1), 3–23.
Cummings, L. R. (2000).The Financial Performance of Ethical Investment Trusts: An Australian
Perspective. Journal of Business Ethics, 25, 79–92.
Derwall, J., N. Guenster, R. Bauer, and K.C.G. Koedijk (2005). Socially responsible investing:
The ecoefficiency premium puzzle, Financial Analysts Journal, 61, 51–63
Dorn, D., Humberman, G. (2005). Talk and Action. What Individual Investors Say and what they
Do. Review of Finance, 9, 437-481
46 | P a g e
Dunfee, T. W.(2003). Social Investing: Mainstream or Backwater?, Journal of Business Ethics,
43(3), 247–252.
Eurosif (2003). Socially Responsible Investment among European Institutional Investors, 2003
report.
Eurosif, European social study (2010, revisited edition).
Fernandes, M. F., Randall, D. M. (1992). The Nature of Social Desirability Response Effects in
Ethics Research. Business Ethics Quarterly, 2 (2), 183-205.
Frankfort-Nachmias, C. and Nachmias, D.(1992). Research Methods in the Social Sciences,
Fourth Edition (Edward Arnold, London).
Freeman, R.E. (1999). Divergent stakeholder theory, Academy of Management Review, 24 (2),
222-227
Girard, E., Stone, B., Rahman, H. (2007). Socially Responsible Investment: Goody-two-shoes or
Bad to the Bone. Journal of Investing, 16 (1), 96-110.
Glac, K. (2009). Understanding Socially Responsible Investing: The Effect of Decision Frames
and Trade-off Options. Journal of Business Ethics, 87 (1).
Graham, J.R., Campbell, R. H. and Huang, H. (2009). Investor competence, trading frequency,
and home bias. Management Science, 55, 1094-1106
Gribben, C. and Faruk, A. (2004). Will Uk, pension funds become more responsible? A survey of
trustees. Just Pensions.
Grinblatt, M., and Keloharju, M. (2001). What Makes InvestorsTrade? The Journal of Finance,
56(2), 589- 616.
Gray, J. (2009). Rethinking Investment Beliefs in a Time of Crisis: The Calming Hand
of Philosophy. Rotman International Journal of Pension Management, 6.
Guerard, J. (1997a). Is There a Cost to Being Socially Responsible in Investing?, Journal of
Investing, 6(2), 11– 18.
Hamilton, S., Jo, H. and Statman M (1993). Doing well while doing good” The investment
performance of socially responsible mutual funds. Financial Analysts Journal, November-
December, 62-66
Hayes, J. (2001).We Want Values for Money, The Australian, 31.
Hebb et al. (2012). Measuring the impact of engagement in Canada, in Hebb (Ed) (2012). The
next generation of responsible investing, Springer Science + Business Media B.V.
Hong, Harrison G., Kostovetsky , L.(2009). Red and Blue Investing: Values and Finance.”
47 | P a g e
Working Paper
Hong, Harrison G., Kacperczyk, M.(2009). The Price of Sin: The Effects of Social Norms on
Markets.” Journal of Financial Economics, 93, 15-36
Hong, Harrison G., Marcin Kacperczyk (2009). The Price of Sin: The Effects of Social Norms
on Markets. Journal of Financial Economics, 93, 15-36
Hsieh, H.-F., & Shannon, S.E. (2005). Three approaches to qualitative content analysis.
Qualitative Health Research, 15(9), 1277-1288.
Jick, T.D. ( 1 9 7 9 ). Mixing qualitative and quantitative methods: Triangulation in action.
Administrative Science Quarterly, 24, 602-611.
Keefe, J. (2007). From SRI to Sustainable Investing. Green Money Journal
Kennedy, L. (2001). Ethical Funds No Longer on the Fringe,. Australian Financial, Review 7.
Kinder, P. D., Domini, A. (1997). Social Screening: Paradigms Old and New. Journal of
Investing, 6, (4),12- 19.
Koedijk, C.G., A. Slager (2007). Investment beliefs: The importance of focus fora in institutional
investor. European Pension Academy, Available at SSRN: http://ssrn.com/abstract=1313859
Korniotis, G. M., and Kumar,A.(2010). Do Older Investors Make Better Investment Decisions?.
The Review of Economics and Statistics, forthcoming
Koedijk, K.,Slager, A. (2009).Do Institutional Investors Have Sensible Investment
Beliefs. Rotman International Journal of Pension Management, 2 (1), 12-20
Krosinsky, C., Robins, N., and Viederman, S. (2012). After the credit crisis-The future of
Sustainable Investing, in The Next Generation of Responsible Investing (Tessa Hebb Editor),
Advances in Business Ethics Research, Springer, pp 9-25
Lewis, A. (2001). A focus group study of the motivation to invest: ‘ethical/green’ and ‘ordinary’
investors compared. Journal of Socio-Economics, 30, 331–341
Lewis, A. (2002) Morals, Markets and Money: Ethical, Green and Socially Responsible Finance
Financial Times Prentice Hall, Harlow, UK.
Lewis, A. and Mackenzie, C. (2000b).Support for Investor Activism among U.K. Ethical
Investors”, Journal of Business Ethics, 24(3), 215–222.
Lewis, A., Mackenzie C. (2000a). Morals, money, ethical investing and economic psychology,
Human Relations, 53 (2), 179-191
Mackenzie, C.,Lewis, A. (1999). Morals and Markets: The Case of Ethical Investing. Business
Ethics Quarterly 9(3), 439–452.
48 | P a g e
Massa, M. (2003). How Do Family Strategies Affect Fund Performance? When Performance
Maximization Is Not the Only Game in Town. Journal of Financial Economics, 67(2), 249-304.
Matterson, H. (2000). Ethics Admirable but Money comes First. The Australian, 35.
McLachlan, J. and J. Gardner, J.(2004). A Comparison of Socially Responsible and Conventional
Investors. Journal of Business Ethics, 52(1), 11–25.
McWilliams, A., Siegel D. (1997). EventStudies in Management Research: Theoretical and
Empirical Issues. Academy of Management Journal, 40, 626-657
Merton, R.K., Fiske, M., Kendall, P.L. (1990). The focused interview : a manual of problems
and procedures (2e ed.). New York : Free Press.
Morin, E. (2005). Introduction à la pensée complexe, Paris : Seuil, 158 p.
Naggy, R. A., Obenberger, R. W. (1994). Factors influencing individual investor
behavior. Financial Analysts Journal, 50(4), 63–68.
Plantinga, A., Scholtens,B. (2001). Socially Responsible Investing and Management Style of
Mutual Funds in the Euronext Stock Markets. University of Groningen, Research Institute SOM
(Systems, Organisations, and Management) Research Report 01E17
Pivo, G. (2005). Is there a future for socially responsible property investments?, Real Estate
Issues, 30 (1), 16-26
Randall, D. M., Fernandes, M. F. (1991). The social desirability response bias in ethics
research. Journal of Business Ethics, 10, 805-817.
Renneboog, L, Ter Horst, J., Chendi Zhang, C. (2008). Socially responsible investments:
Institutional aspects, performance, and investor behavior. Journal of Banking & Finance, 32,
1723–1742.
Repetto, R., Austin. D. (2000b). Pure Profit: The Financial Implications of Environmental
Performance, Washington, D.C., World Resources Institute.
Rosen, B. N., Sandler, D. M. and Shani, D.(1991). SocialIssues and Socially Responsible
Investment Behavior: A Preliminary Empirical Investigation. The Journal of Consumer Affairs,
25(3), 221–234.
Russo, Orlitzky, M., Schmidt, F.L, Rynes, S.L (2003). Corporate social and financial
performance: A meta-analysis. Organization Studies, 24 (3), 403-441
Russo, M.V., Fouts, A.P.(1997). Resource-Based Perspective on Corporate Environmental
Performance and Profitability. Academy of Management Journal, June 1997.
49 | P a g e
Sauer, D. A. (1997). The Impact of Social-Responsibility Screens on Investment Performance:
Evidence from the Domini 400 Social Index and Domini Equity Mutual Fund. Review of
Financial Economics, 6, (2)
Schueth, S. (2003). Socially Responsible Investing in the United States. Journal of Business
Ethics, 43, 189–194.
Sheth, J.N., Newman, B.I., Gross, B.L. (1991a). Consumption Values and Market Choices:
Theory and Applications. Cincinnati, South-Western Publishing Co.
Social Investment Organization (May 2011). Canadian Socially Responsible Investment Review
2010. A comprehensive survey of socially responsible investment in Canada.
Sparkes, R.. (2001). Ethical Investment: Whose Ethics, which Investment?. Business Ethics: A
European Review, 10, 194–205.
Statman, M.(2000) . Socially responsible mutual funds, Financial Analyst Journal, 56 (3), 30–39.
Statman, M. (2008). Socially Responsible Investors and Their Advisors. The Journal of
Investment Consulting, 9 (1).
Statman, M., Glushkov, D. (2009). The Wages of Social Responsibility. Financial Analysts
Journal, 65, 33-64.
Stewart, D.W. (1984). Secondary Research: Information Sources and Methods, Beverly
Hills, Sage.
Tippet, J. and Leung,P.(2001). Defining Ethical Investment and its Demography in Australia.
Australian Accounting Review, 11(3), 44–55.
Webley P., Lewis A. et Mackenzie C. (2001). Commitment Among Ethical Investors : An
Experimental Approach. Journal of Economic Psychology, 22 (1).
Wood,D., Jones, R. (1995). Stakeholder mismatching: A theoretical problem in empirical
research on corporate social performance. International Journal of Organizational Analysis, 3,
229-267.
Yin, R. K. (2003). Case study research: Design and methods (3rd ed.). Thousand Oaks, CA:
Sage.
Young, W., Hwang, K., McDonald, S.and Oates, C.J.(2010). Sustainable Consumption: Green
Consumer Behaviour when Purchasing Products, Sustainable Development, 18, 20–31