Integration of non-financial criteria in equity investment

Abstract

In recent years the awareness of social, environmental and governance issues associated with investments have drawn relevant interest in the investment industry. Investors are more careful in considering investments that comply with their ethical and moral values, as well as with social impact. Hence, the ethical and social responsibility of investments (SRI) is becoming more popular in the academic literature due to the fact that socially responsible investment provide profitability and social commitment together. In this contribution we discuss the main issues that arise when integrating socially responsible criteria into a financial decision problem.