Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOI
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

User menu

  • Sample our Content
  • Request a Demo
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Investing
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Request a Demo
  • Log in
The Journal of Investing

The Journal of Investing

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOI
    • Editorial Board
    • Published Ahead of Print (PAP)
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

Three Pillars of Modern Responsible Investment

Lloyd Kurtz
The Journal of Investing ESG Special Issue 2020, 29 (2) 21-32; DOI: https://doi.org/10.3905/joi.2020.1.116
Lloyd Kurtz
is a senior portfolio manager and head of the Social Impact Investing team at Wells Fargo Private Wealth Management in San Francisco, CA
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Click to login and read the full article.

Don’t have access? Click here to request a demo 

Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600

Abstract

Modern responsible investment encompasses three distinct activities: alignment of portfolios with client values, using exclusions; integration of environmental, social, and governance (ESG) factors into the investment process, often with a focus on financial materiality; and impact, which in public markets is usually sought through engagement with corporate management. All three fields are progressing rapidly, and each has a distinctive set of professional practices and supporting empirical literature: The performance effects of typical exclusion policies apparently remain benign, but recent research suggests that information about ESG performance may have important implications for portfolio risk. The emerging evidence on engagement is potentially disruptive, with a small but strong group of papers suggesting that it can positively affect financial and stock market performance, as well as the investment behavior of corporate managers. With new practices and findings emerging in each of these areas, investment professionals will be challenged to keep up with the pace of innovation and, in an increasingly competitive marketplace, to implement these policies at a high standard.

TOPICS: ESG investing, portfolio theory, portfolio construction

Key Findings

  • • The field of responsible investment is complex, and modern practice requires that practitioners develop facility in three distinct but related areas, each with its own goals, practices, and empirical literature. This article addresses recent research in these areas, and finds strong empirical support for some practices.

  • • The field of EGS integration is becoming more standardized with the advent of disclosure such as those published by the Sustainability Accounting Standards Board. Many studies document an association between ESG performance and traditional ideas of firm quality, and a few good papers have documented instances where ESG factors were associated with strong investment performance. But many studies have significant methodological shortcomings. With ESG practices becoming more widespread it is not realistic to expect significant performance benefits from typical ESG integration practices.

  • • The UNPRI active ownership mandate has led to a significant increase in corporate engagement efforts. A small but strong group of papers suggests that, when successful, these initiatives have positive impacts on near-term stock price performance of targeted companies, as well as subsequent corporate investment behavior.

  • © 2020 Pageant Media Ltd
View Full Text

Don’t have access? Click here to request a demo

Alternatively, Call a member of the team to discuss membership options

US and Overseas: +1 646-931-9045

UK: 0207 139 1600

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Investing: 29 (2)
The Journal of Investing
Vol. 29, Issue 2
ESG Special Issue 2020
  • Table of Contents
  • Index by author
  • Complete Issue (PDF)
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Investing.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Three Pillars of Modern Responsible Investment
(Your Name) has sent you a message from The Journal of Investing
(Your Name) thought you would like to see the The Journal of Investing web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Three Pillars of Modern Responsible Investment
Lloyd Kurtz
The Journal of Investing Jan 2020, 29 (2) 21-32; DOI: 10.3905/joi.2020.1.116

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Three Pillars of Modern Responsible Investment
Lloyd Kurtz
The Journal of Investing Jan 2020, 29 (2) 21-32; DOI: 10.3905/joi.2020.1.116
del.icio.us logo Digg logo Reddit logo Twitter logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
    • Abstract
    • ALIGNMENT
    • ESG INTEGRATION
    • IMPACT: SEEKING POSITIVE CHANGE
    • CONCLUSION
    • ADDITIONAL READING
    • ENDNOTES
    • REFERENCES
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • No citing articles found.
  • Google Scholar
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2022 Pageant Media Ltd | All Rights Reserved | ISSN: 1068-0896 | E-ISSN: 2168-8613

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy