Socially Responsible Investment: Achieve Financial Goals?

Nowadays, investors have variety of options for investment, in order to get a return that they planned. Furthermore, investors would decide easier if those investments are related to sustainability. Socially Responsible Investment is a good type of investment which seeks to generate financial goals, sustainability, and social responsibility. This paper was written to prove the fact that SRI is not only contributing to advancements in environmental, social and governance practices but also aim for strong financial performance. Therefore, I selected 5 US companies which have a positive social, environmental and governance. All of Company chose from MSCI KLD 400 Social Index (DSI) for representing the SRI investment market performance. Those 5 companies would be an important part that proves the SRI can achieve the financial goals. This research using ten years of historical data, focus on daily percentage change of stock of each company and see the percentage has grown year over year. Then this study would use the Capital asset pricing model (CAPM) to estimate expected returns on stocks. The result of this paper will help investors that interest in SRI investment and help investors in making investment decisions on SRI.