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How Do Socially Responsible Investment Funds Go Green? The Influence of Investment Styles and managers' Experience

Mercadier, Mathieu, Rannou, Yves, Boutabba, Mohamed Amine and Chen, Jinzhao (2025) How Do Socially Responsible Investment Funds Go Green? The Influence of Investment Styles and managers' Experience. International Journal of Finance & Economics, 30 (3). pp. 3138-3168. ISSN 1099-1158

Abstract
We provide an holdings-based analysis of socially responsible investment (SRI hereafter) funds' greenness and its determinants in Europe over 8 years (2015–22). To this end, a segmentation of SRI funds by greenness degree based on k-means clustering is developed. Our results reveal that SRI funds' greenness depends on specific investment styles and the salient experience of managers in SRI. We verify that greening an SRI fund implies a higher stock selectivity leading managers to underweight their portfolios with fossil fuel stocks and raise the weight of green stocks once SRI market regulations in Europe have been implemented. Also, we find that active investment styles make SRI funds greener. Moreover, we provide evidence of counteracting experience effects provided that the more (resp. less) the manager is experienced in SRI (resp. mutual fund industry), the greener the fund is. In addition to those experience effects, we detect a gender diversity effect provided that a greater gender diversity in fund management teams contributes to increase SRI funds' greenness. Overall, our findings support the argument that the experience and abilities of fund managers are important factors for investors to consider when they choose SRI funds notably because skilled professionals with more experience in SRI are more likely to adapt to regulatory shifts.
Metadata
Item Type:Article (Published)
Refereed:Yes
Uncontrolled Keywords:Socially Responsible Investment (SRI); Mutual funds; Greenness; K-means clustering; Manager Experience; Active strategies
Subjects:Business > Finance
Business > Management
DCU Faculties and Centres:DCU Faculties and Schools > DCU Business School
Publisher:John Wiley & Sons Ltd.
Official URL:https://onlinelibrary.wiley.com/doi/abs/10.1002/ij...
Copyright Information:Authors
ID Code:32777
Deposited On:09 Jun 2026 14:26 by Tam Nguyen . Last Modified 09 Jun 2026 14:26
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