Investing in socially responsible mutual funds: Proposal of non-financial ranking in Italian market

Abstract

Currently, one of the main instruments of Socially Responsible Investment is mutual funds. Their growth in the financial market has been remarkable over the past few years, which has also paralleled the growth in the business ethics literature.

The aim of the present work is to present a methodology useful to define a portfolio selection model for measuring the attractiveness of socially responsible asset investments. The result is the definition of a non-financial ranking to complete financial information about mutual funds for investors demanding Corporate Social Responsibility. The methodology focuses on social responsibility decision-making criteria and their weights agreed by the main stakeholders. The research, based on a well-known multi-criteria method, the Analytic Hierarchy Process (AHP), proves that the methodology is feasible and gives useful results for investors demanding social responsibility.