ALIGNING INVESTMENTS WITH VALUES: CREATING PORTFOLIOS BASED ON CORPORATE SOCIAL RESPONSIBILITY AND NIM

Title

ALIGNING INVESTMENTS WITH VALUES: CREATING PORTFOLIOS BASED ON CORPORATE SOCIAL RESPONSIBILITY AND NIM

Creator

Sachdeva S.; Ramesh L.

Description

Purpose: This research discusses the importance of corporate social responsibility (CSR) and its link to a financial performance metric called net interest margin (NIM) in the context of non-banking financial companies (NBFCs). CSR initiatives can lead to long-term sustainability and improved financial performance, attracting investors seeking to align their investments with their values. Need for the Study: The research composes portfolios based on financial companies CSR performance and NIM ratios to help investors understand the difference between CSR and financial performance, making investment decisions based on their portfolio goals and values. Striking a balance between sustainability and the financial performance of financial companies, will help investors find a suitable balance between portfolios for investment purposes. Methodology: The authors used data from 55 financial companies for daily returns from 20142015 to 20212022 and used descriptive statistics to measure the performance of portfolios. Findings: The findings suggest that financial companies in India have improved their CSR scores over time, indicating an increased focus on integrating socially responsible practices into their operations. The data also show that NBFCs are catching up with banks regarding CSR scores, and some NBFC portfolios even outperform banks regarding returns. However, the study also highlights the need for some companies to focus more on CSR and business operations. Practical Implications: The results serve as a benchmark for financial companies to assess their relative CSR performance, highlighting the need for companies to focus on integrating socially responsible practices into their operations and guiding areas where companies can improve. 2024 by Ishfaq Hussain Bhat, Shilpi Gupta and Satinder Singh Published under exclusive licence by Emerald Publishing Limited.

Source

Contemporary Studies in Economic and Financial Analysis, Vol-113A, pp. 167-182.

Date

2024-01-01

Publisher

Emerald Publishing

Subject

banks; CSR; financial companies; investment; NBFCs; net interest margin; portfolio

Coverage

Sachdeva S., Christ University, Karnataka, Bengaluru, India; Ramesh L., Christ University, Karnataka, Bengaluru, India

Rights

Restricted Access

Relation

ISSN: 15693759

Format

Online

Language

English

Type

Book chapter

Identifier

https://doi.org/10.1108/S1569-37592024000113A011

https://www.scopus.com/inward/record.uri?eid=2-s2.0-85193830355&doi=10.1108%2fS1569-37592024000113A011&partnerID=40&md5=d05e249ad5436d53cb04628f98699a8c