The stocks at stake: Return and risk in socially responsible investment

Rients Galema, Auke Plantinga, Bert Scholtens*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

278 Citations (Scopus)


We relate US portfolio returns, book-to-market values and excess stock returns to different dimensions of socially responsible performance. We find that socially responsible investing (SRI) impacts on stock returns by lowering the book-to-market ratio and not by generating positive alphas. Our result is consistent with the theoretical work suggesting that SRI is reflected in demand differences between SRI and non-SRI stock. It also explains why so few studies are able to establish a link between alpha's and SRI.

Original languageEnglish
Pages (from-to)2646-2654
Number of pages9
JournalJournal of Banking & Finance
Issue number12
Publication statusPublished - Dec 2008


  • Corporate governance
  • Corporate social responsibility
  • Financial performance
  • GMM
  • Return
  • Risk
  • Stakeholder management


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