Socially responsible investment and financial performance: evidence from the Johannesburg securities exchange
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Authors
Mutezo, Ashley Teedzwi
Issue Date
2014
Type
Article
Language
en
Keywords
Socially responsible investing , Corporate social responsibility , Johannesburg securities exchange , Financial performance , SRI Index
Alternative Title
Abstract
Socially responsible investment (SRI) is fast becoming one of the major considerations for investors across the world.
Both corporate and individual investors use the SRI index of organizations to make investment decisions. Although
this model of investing is popular in the Western world, evidence suggests that the process has been gaining prominence
in the developing world. The Johannesburg Securities Exchange (JSE) launched its Socially Responsible Investment Index
(SRI Index) in 2004 as a means of identifying an index of listed companies that integrate the principles of triple bottom
line reporting in their business activities. Using panel data regression, this article analyzes the financial performance
of companies listed on the JSE SRI Index between 2004 and 2010 in relation to their social responsibility measures. The
results demonstrate that companies listed as constituents of the JSE SRI Index have better financial performance than
those that are non-constituents. A high awareness of social responsibility as indicated by the JSE SRI Index makes for a
more profitable portfolio and enhances the prospects of listed companies that are rated as having attained a certain level of
social responsibility as indicated by the JSE SRI Index to yield better returns to their investors.
Description
Citation
Mutezo, Ashley. 2014. Socially responsible investment and financial performance: evidence from the Johannesburg securities exchange. Banks and Bank Systems, 9(3): 120-128
Publisher
Business Perspectives
License
Journal
Volume
Issue
PubMed ID
DOI
ISSN
1991-7074