What drives socially responsible investment? The case of the Netherlands

Bert Scholtens*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)


This paper asks what determines the growth of socially responsible savings and investments in the Netherlands. We find that special tax regulation can be held responsible for more than half of the growth in socially responsible savings and investments during the period 1995-2001. It has resulted in socially and environmentally worthwhile projects that would otherwise not have had access to finance. Furthermore, it appears that investors in the Netherlands are sensitive to changes in the underlying regulation. However, an important fraction of the investors is likely to keep their investments if the favourable tax treatment were to be abandoned. This paper also investigates the financial performance of socially responsible savings and investments. We find that the investments earn returns that do not significantly differ from the return on their benchmarks. The risk, however, is significantly above that of the benchmark. In contrast, socially responsible savings earn a higher (after-tax) return and have equal risk in comparison with ordinary savings.

Original languageEnglish
Pages (from-to)129-137
Number of pages9
JournalSustainable Development
Issue number2
Publication statusPublished - Apr 2005


  • Regulation
  • Savings
  • Socially responsible investment
  • Taxation


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