Socially responsible investments (SRI) – also known as ethical or sustainable investments – are gaining interest among scholars and practitioners. The increase in social awareness by institutions has led to an investment process that integrates ethical values, environmental protection, improved social conditions, and good governance into traditional investment decision-making. The main purpose of this paper is to better understand if environmental social governance (ESG) criteria integration in investment strategies can support the transition of finance toward more sustainable growth.
An explorative analysis based on a multiple case study has been conducted and addressed by a content analysis on the Key Investors Information Documents (KIIDs) that the sample companies published for 2020.
1.) If investors are increasingly demanding better integration of sustainability into investment processes, clients are also found to demonstrate a mounting interest in responsible and sustainable investing.
2.) The sample companies demonstrated a similar approach to SRI strategies, in which they mostly incorporate issues about society, governance, sustainable development, and the environment.
3.) Though the case companies studied were open to disclosing information about their ESG efforts, almost all of them seem to be far from the full integration of ESG criteria.
Implications for Practice
Asset management companies (AMCs), managers, and consultants developing and implementing SRI strategies should be much more focused on the way they approach ESG integration and related communication. To attract investors, AMCs are gradually integrating the ESG criteria into their financial communication (e.g., KIID) through voluntary, additional disclosure.
Sciarelli, M., Cosimato, S., Landi, G. and Iandolo, F. (2021), “Socially responsible investment strategies for the transition towards sustainable development: the importance of integrating and communicating ESG”, The TQM Journal, Vol. 33 No. 7, pp. 39-56. https://doi.org/10.1108/TQM-08-2020-0180
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