The Religions of Social Responsibility

Abstract

Investors who follow different tenets of social responsibility and choose different socially responsible mutual funds might be described as members of different religious denominations. Some social responsibility “religions” have a single tenet, such as protection of the environment. Others combine several, such as avoidance of tobacco, alcohol, and weapons-making. A framework of the economics of religion can help us answer questions such as why some mutual funds attract many investors while others attract few; the differences between strategies that are effective at attracting individual versus institutional investors to SRI; and whether government regulations aimed at fostering SRI are likely to accomplish their aim.