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Beyond Socially Responsible Investing: Effects of Mission-Driven Portfolio Selection

Fritz, Tizian Marco and von Schnurbein, Georg. (2019) Beyond Socially Responsible Investing: Effects of Mission-Driven Portfolio Selection. Sustainability, 11 (23). pp. 1-15.

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Official URL: https://edoc.unibas.ch/73128/

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Abstract

In their pursuit of value creation, charitable foundations are mission- rather than profit-driven. Therefore, foundations are also mission-driven investors. We explore the effects of mission-driven portfolio selection based on three model foundations, representing common fields of activity in Switzerland. Employing a moving block bootstrap approach, we simulate time series. Based on these model foundations and under the integration of qualitative company rating data, such as environmental, social, and governance-related characteristics (ESG), we find both negative and no significant financial effects of portfolio screening. However, screening portfolios substantially increases mission-driven portfolio quality. Additionally, screening reduces reputational risks and even leptokurtic return characteristics under special consideration of governance issues. After a joint analysis of financial and qualitative factors for portfolios with equity shares of 25% and 50%, we did find strong enough evidence to encourage foundations to implement negative and positive screening criteria. Additionally, we argue that without the integration of mission-based qualitative criteria, for instance, the involvement in business activities contradicting the foundation's mission, an adequate evaluation of investment opportunities' desirability is not feasible.
Faculties and Departments:08 Cross-disciplinary Subjects > Center for Philanthropy Studies (CEPS) > Stiftungsmanagement (von Schnurbein)
UniBasel Contributors:von Schnurbein, Georg and Fritz, Tizian Marco
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:MDPI
Note:Publication type according to Uni Basel Research Database: Journal article -- Article nr. 6812
Language:English
Identification Number:
Last Modified:05 Feb 2020 07:58
Deposited On:09 Dec 2019 08:04

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