Publications
Publications
- 2020
The Allocation of Socially Responsible Capital
By: Daniel Green and Benjamin N. Roth
Abstract
A rapidly increasing share of asset allocation decisions incorporate social values in addition to financial considerations. We argue that the most common strategies for socially motivated investing, which only consider the social value of the firms in an investors' portfolio, are misguided. We develop a tractable framework in which commercial and social investors compete, and identify alternative strategies for social investors that result in higher social welfare and deliver higher financial returns. We discuss several normative implications for socially-motivated investors. From the enterprise perspective, we demonstrate that a focus on increasing profitability can have a greater social impact than a focus on direct social value creation.
Keywords
Socially Responsible Investing; Assets; Resource Allocation; Social Issues; Decision Making; Strategy; Framework
Citation
Green, Daniel, and Benjamin N. Roth. "The Allocation of Socially Responsible Capital." Working Paper, November 2020.