Academic Research on Positive Screening in Impact Investing
Positive screening refers to the investment strategy that involves selecting assets based on their positive contributions to social and environmental goals, rather than merely excluding negative ones. This approach has gained traction in the realm of impact investing, which seeks to generate measurable social and environmental impact alongside financial returns.
Key Studies
- Porter & Kramer (2011): This seminal paper discusses how businesses can create shared value by addressing social issues, thereby linking profitability with positive societal impact and suggesting frameworks for positive screening.
- Mackenzie et al. (2014): This research highlights specific cases where positive screening led to enhanced performance metrics, showcasing the financial viability of investing in companies that prioritize sustainability and social responsibility.
- Eccles, Ioannou & Serafeim (2014): The authors examine the long-term financial performance of firms employing positive screening and find that these companies often outperform their peers due to better risk management and innovative practices.
Implications for Investors
The findings from these studies suggest that investors who implement positive screening can achieve competitive financial returns while contributing to societal benefits. This dual-focused approach is increasingly appealing in today's market, contributing to the growing body of literature surrounding sustainable finance and responsible investing.