Business and Society

Is there a cost to being socially responsible in investing?

January 30, 2008 | 1 min read

In his paper, “Is There a Cost to Being Socially Responsible in Investing?”, Guerard examines the returns of Vantage Global Advisors’ 1,300 stock unscreened universe and a 950 stock screened universe to determine if the returns are different at the 5% level of significance. They are not. He finds that a composite model using value and growth variables produces an expected return ranking list that generates equivalent excess returns in socially-screened and unscreened portfolios.

Guerard comments that these [social] “criteria do not “cost” the investor any meaningful average return during the 1987-1994 period and may have produced positive active (relative to the S&P 500) returns during some sub periods.” He also states that “Vantage’s experience indicates that it is not “dumb” to be a socially conscious investor.”

This paper won the 1996 Moskowitz Prize competition, awarded by the Social Investment Forum. The Moskowitz Prize, which in 2004 became an initiative of the Center for Responsible Business at the University of California, Berkeley, promotes the concept, practice, and growth of socially responsible investing.


This article may be reproduced according to our terms of use with attribution (and link, if online) to To be cited as: “Is there a cost to being socially responsible in investing?”, John B. Guerard,, January 30, 2008.

Read more

Research Paper

Knowledge area's

Grow at TIAS

At TIAS we believe in Life Long Development, continuous personal, professional and network development during and after your studies. With more knowledge, better skills and a broader network, you will be able to create more impact and be successful.

More about learning at TIAS » 

Brochure TIAS School for Business & Society

Get to know TIAS: The business school for tomorrow's leaders.