Customer satisfaction with socially responsible investing initiatives: The influence of perceived financial and non-financial quality

Nilsson, Jonas; Jansson, Johan; Isberg, Sofia; Nordvall, Anna-Carin

doi:10.1057/fsm.2014.24

Cited by 18 publications

(17 citation statements)

References 35 publications

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“…Furthermore, previous research on SRI has been examined from individual investors' perspective in pre and post purchase situations with focus on financial and social criteria for choices and evaluations (e.g., Barreda-Tarrazona et al, 2011;Nilsson et al, 2014;Nilsson et al, 2010). This study focuses on SMEs' choice of pension fund management for their employees' occupational pension deposits, considering financial, SR, and quality signaling effects on their choices.…”

Section: Buying Csr With Employees' Pensions? the Effect Of Social Rementioning

confidence: 99%

“…Even SR investors invest in mutual funds, rather than give money to charity to enhance their financial utility as they expect positive risk-adjusted returns on their investments (Renneboog et al, 2008a). Similarly, Nilsson et al (2014) show that financial performance of the SRI-profiled fund is the most important predictor of customer satisfaction.…”

Section: Pension Fund's Expected Returnmentioning

confidence: 99%

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Buying CSR with employees’ pensions? The effect of social responsible investments on Norwegian SMEs’ choice of pension fund management

Biong

Silkoset

2017

IJBM

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PurposeEmployees often expect an emphasis on financial aspects to be predominant when their employers choose a fund management company for the investment of employees' pension fund deposits. By contrast, in an attempt to appear as socially responsible company managers may emphasize social responsibility in pension fund choices. This study examines to what extent managers for small and medium sized companies emphasize social responsibility (SR) vs. expected returns when choosing investment managers for their employees' pension funds. Design/methodology/approachA conjoint experiment among 276 Norwegian SMEs' decision makers examines their tradeoffs between social and financial goals in their choice of employees' pension management.Furthermore, the study examines how the companies' decision makers' characteristics influence their pension fund management choices. FindingsThe findings show that the employers placed the greatest weight to suppliers providing funds adhering to socially responsible investment (SRI) practices, followed by the suppliers' corporate brand credibility, the funds' expected return, and the suppliers' management fees.Second, employers with investment expertise emphasized expected returns and downplayed social responsibility in their choice, whereas employers with stated CSR-strategies downplayed expected return and emphasized SR. Originality/valueChoice of supplier to manage employees' pension funds relates to a general discussion on whether companies should do well -maximizing value, or do good, -maximizing corporate social responsibility. In this study, doing well means maximizing expected returns and minimizing costs of the pension investments, whereas doing good means emphasizing SRI in this choice. Unfortunately, the employees might pay a price for their companies' ethicality as moral considerations may conflict with maximizing the employees' pension fund value.

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Section: Buying Csr With Employees' Pensions? the Effect Of Social Rementioning

confidence: 99%

Section: Pension Fund's Expected Returnmentioning

confidence: 99%

Buying CSR with employees’ pensions? The effect of social responsible investments on Norwegian SMEs’ choice of pension fund management

Biong

Silkoset

2017

IJBM

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“…On account of this, results are conflicting and to some extent inconclusive (Nielsen, 2014). Furthermore, existing literature almost exclusively focuses on the financial consequences of accounting for ESG and research on the drivers or challenges for RI are limited (Sievänen et al, 2013).…”

Section: Research Motivationmentioning

confidence: 99%

“…Another implication for investors is assets becoming stranded, that is, suffering from unanticipated or premature write-downs, or loss of value as a result of being overexposed to environment-related risks (Caldecott, Tilbury, & Carey, 2014). The loss in value may be due to future regulation, policies or changing consumer attitudesfor example, thermal coal assets could decline in value if carbon taxes are imposed or if there is a higher price for carbon emissions (Nielsen, 2014). Thus, corporations that have a significant amount of investment in fossil fuel face valuation risk in the future if such assets cease being used due to changes in legislation (Nielsen, 2014).…”

Section: Clients Demandmentioning

confidence: 99%

“…Responsible investment (RI) is the investment strategy that incorporates environmental, social and governance (ESG) factors into the investment decision-making process (Hebb et al, 2015). RI began in the eighteenth century as a small movement of faith-based investors, but gained momentum in the mid-2000s to become one of the fastest-growing areas of finance in many parts of the world (Arjaliès, 2010;Derwall, Koedijk, & Ter Horst, 2011;Falcone, Morone, & Sica, 2018;Nilsson, Jansson, Isberg, & Nordvall, 2014;Nofsinger & Varma, 2014;Revelli, 2017;Sandberg & Nilsson, 2011;Sullivan & Mackenzie, 2006;Zarbafi, 2011).…”

Section: Chapter 1 Introductionmentioning

confidence: 99%

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Challenges for Responsible Investment in the retirement benefits sector of Kenya

Mathenge¹

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Responsible investment (RI) is the investment strategy that incorporates environmental, social and governance (ESG) factors into the investment decision-making process (Hebb, Hawley, Hoepner, Neher, & Wood, 2015). RI has shifted from what was considered a niche market to become one of the fastest-growing areas of finance in many parts of the world (PRI, 2019b). However, a closer look at the development of RI and adoption rates in countries and regions reveals that RI is not commonly practised in sub-Sahara Africa (except for South Africa). This study explores the critical challenges for RI development in the retirement benefits sector of Kenya and, by engaging with a variety of key stakeholders, proposes how to overcome the identified challenges. It contributes to the literature on challenges for RI in a developing country by offering an in-depth case study of the retirement benefits sector. My study employs qualitative methods to collect and analyse data collected from semi-structured interviews with 22 participants (asset managers, regulators and capital market experts, and a council member of the Association of Retirement Benefits Schemes of Kenya) as well as a collection of published documents by government agencies in Kenya. Also, I analysed 10 annual reports to assess the kind of ESG information that is disclosed by listed companies. My study explores, in particular, how actors in the retirement benefits sector conceptualise RI. It identifies the leading ESG factors in Kenya and draws on the business-case approach to RI to explore whether the participants consider those factors as material risk factors that present both risks and opportunities to the investment decision-making process. Further, my study identifies the specific barriers for RI development and proposes how to overcome them. The findings show that participants define RI using several terminologies. This is consistent with the existing literature. My study finds that all participants consider corporate governance as a material risk factor that can impact the financial returns of a portfolio. However, most of the asset managers do not think that the environmental and social factors can present material risk factors to their investment decision-making process. Although over a third of the asset managers recognise that the environmental and social issues in Kenya present business opportunities to retirement benefits schemes, there is a shortage of well-structured assets in those areas. Further, this study identifies five specific barriers for RI development: diversification challenges; a lack of ESG data; a lack of demand/incentives; short-termism; and the demand for high financial returns and a lack of awareness and expert knowledge of RI practices. My study recommends that the National Treasury of Kenya develops RI policy for the entire finance sector. In addition, the findings support a recommendation for the Capital Markets Authority and the Retirement Benefits Authority to embark on capacity building programmes to educate the actors in the finance sector on RI strategies and to create awareness of the impact of ESG on financial returns in the long run.

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Is ESG mutual fund quality in the eye of the beholder? An experimental study of investor responses to ESG fund strategies

Hauff

Nilsson

2022

Bus Strat Env

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ESG-profiled mutual funds (funds incorporating some form of Environmental, Social, or Governance-related concern) is an increasingly prominent part of the financial services industry. While this category of funds may look homogenous on the surface, the fact is that there is there is considerable variation in how funds choose to account for ESG concern in the investment portfolio. In this paper, we ask whether these strategic choices surrounding the implementation of ESG affect retail investors' perception of sustainable quality, financial quality, and/or perceived overall quality of the ESG-fund. Through two experiments (n = 261; n = 437), we find that choice of ESG-strategy (exclusion, inclusion, or engagement) impacts perceived mutual fund quality, with a marked preference for the inclusion strategy. Surprisingly, however, we find that the impact on overall fund quality is mediated by perceived financial quality, not perceived sustainable quality. In a similar fashion, we also find that implementing the strategy through in-house sustainability experts, as opposed to relying on external sustainability expertise, positively affect perceived quality, through perceived financial quality. In all, these results highlight that the manner in which ESGfactors are integrated in the investment portfolio can affect perceived quality of mutual funds, as investors consciously or unconsciously assign different financial expectations to the strategies.

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Customer satisfaction with socially responsible investing initiatives: The influence of perceived financial and non-financial quality

Cited by 18 publications

References 35 publications

Buying CSR with employees’ pensions? The effect of social responsible investments on Norwegian SMEs’ choice of pension fund management

Buying CSR with employees’ pensions? The effect of social responsible investments on Norwegian SMEs’ choice of pension fund management

Challenges for Responsible Investment in the retirement benefits sector of Kenya

Is ESG mutual fund quality in the eye of the beholder? An experimental study of investor responses to ESG fund strategies

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