International Review of Environmental and Resource Economics > Vol 18 > Issue 3

ESG Investing: Conciliating Financial Performance and Sustainable Societal Development

Maurizio Dallocchio, Bocconi University, Italy, , Giorgia Di Summa, Bocconi University, Italy, , Federico Pippo, Bocconi University, Italy, , Irene Riboli, Bocconi University, Italy, , Emanuele Teti, Universitá di Pisa, Italy,
Suggested Citation
Maurizio Dallocchio, Giorgia Di Summa, Federico Pippo, Irene Riboli and Emanuele Teti (2024), "ESG Investing: Conciliating Financial Performance and Sustainable Societal Development", International Review of Environmental and Resource Economics: Vol. 18: No. 3, pp 285-314.

Publication Date: 12 Jun 2024
© 2024 M. Dallocchio et al.
Corporate finance,  Financial markets,  Environmental economics
JEL Codes: G30G31G38
Socially responsible investing (SRI)environmentalsocial and governance (ESG) investingIslamic financeequity mutual fundsportfolio management


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In this article:
1 Introduction 
2 Historical Foundation of SRI 
3 The Evolution of SRI 
4 ESG Investing and Islamic Finance 
5 Literature Review: Assessing the Relationship between SRI and Financial Performance 
6 Conclusions 


Integrating environmental, social, and governance (ESG) considerations into investment decisions has become increasingly popular. In 2020, global assets under management incorporating ESG factors reached $35 trillion, a 55% increase from 2016. Given its growing relevance within the financial and academic community, this paper analyzes the historical evolution of ESG Investing and its most recent developments. It describes the extent to which ESG considerations affect financial performance and outlines the main strategies used by investors when incorporating ESG factors into their financial decisions. This study also introduces Islamic finance, and sheds a light on the main differences, but also similarities, with ESG Investing through a novel comparative approach. Finally, we offer a summary of the main research findings on the performance of socially aware mutual funds through a comprehensive literature review of more than 40 papers (1993–2022), which we hope it will be of practical assistance to scholars and industry professionals looking to develop or refine their investment strategies.