counter this argument because the earnings records of SRI portfolios are generally good (Eaton, 1993, pp. 37-38).
For the investor who would like to foster socially responsible corporate policies, the issues described above are significant. These issues are examined in this study within the context of the following research question: Is the goal of earning a competitive return on one's financial investment compatible with the goal of behaving as a socially responsible citizen? Within the context of this research question, the hypothesis tested in this study was stated as follows: It is hypothesized that the return on investment (ROI) on an SRI portfolio will be competitive with the ROI on a portfolio of socially undesirable equity stocks.
The purpose of this study was to develop information that will assist individual investors in reaching decisions related to the adoption of the SRI concept. It was not the purpose of this study to recommend any specific investment portfolio.
SRI (socially responsible investing) is defined as a practice of investing in firms whose products and services (1) do not harm society or the environment and (2) do create some positive effects for society. While the composition of individual SRI portfolios will vary according to the social values and interests of the individual investor, the essential definition of SRI remains unchanged.
A competitive ROI (return on investment) is defined as one that is approximately equal to (a maximum negative deviation of one-percent) or greater than the mean ROI for the population of investment vehicles being assessed. Alternatively, a competitive ROI may be defined in specific instances as one that is approximately equal to (a maximum negative deviation of one-percent) or greater than the ROI for a competing portfolio.
The findings of this study include the review of literature relevant to the problem investigated, the results of the research performed...