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SRI: common misconceptions |
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Socially responsible investment suffers from a number of common misconceptions:
First misconception : SRI funds underperform
False: Up to now, there is no conclusive evidence on SRI funds performance over the medium/long-term compared to non-SRI funds. However, there is a significant number of studies which show that SRI does not underperform.
Looking at the ASPI Eurozone index, we observe that over the last few years, its performance has been very close to its benchmark index, the Dow Jones Euro Stoxx.
Moreover, SRI offer two advantages: in the short-term, a reduction of the risk of market accidents, and over the medium term, an improvement of the risk/return profile of portfolios.
Second misconception : SRI is restrictive
False: It is perfectly possible to put in place a socially responsible investment policy on a gradual as well as customised basis. It is thus possible to:
- Apply an SRI approach to an entire portfolio or to only part of it;
- Apply SRI to either active or passive management (using indices);
- Apply a turnkey solution (using for example Ethibel range of products or services);
- Apply a customised solution based one’s own criteria.
Third misconception : SRI only concerns equities
False: Vigeo also offers a whole range of research products to fixed-income investors, covering sovereign issuers as well as local authorities, supranationals and unlisted companies.
Perception: SRI may be more suited to medium to long term investment rather than short term investment
True: SRI is particularly recommended for investors with a medium to long term horizon. On a short-term basis, it can also prevent brutal accidents on portfolios linked to CSR risks.
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Preconceived notions 
