The Religions of Social Responsibility
21 Pages Posted: 12 Aug 2005
Date Written: July 2005
Investors who follow different tenets of social responsibility and choose different socially responsible mutual funds can be described as members of different religions. Some social responsibility religions have a single tenet, such as protection of the environment, while other social responsibility religions combine several tenets, such as avoidance of tobacco, alcohol, and weapons. The framework of the economics of religion can help us answer questions such as:
- Why do some mutual funds attract many investors while others attract few?
- What are the differences between strategies that are effective at attracting individual investors to SRI and those effective at attracting institutional ones?
- How do tenets, such as opposition to tobacco, come to the forefront or recede?
- Are government regulations aimed at fostering SRI likely to accomplish their aim or are they likely to retard SRI? And is the SRI movement likely to grow stronger in the U.S. or in Europe?
Keywords: Socially responsible investing, behavioral finance, portfolios
JEL Classification: G11, G12, G18
Suggested Citation: Suggested Citation