Non-Financial Rating and Social Responsible Investment Reaction to financial turmoil

Unlike traditional investments, socially responsible investments (SRIs) use non-financial criteria to screen investments. Thus, the investment strategy is based on the exclusion of companies that do not meet some fixed ecologi- cal, social, corporate governance and ethical criteria (negative screening) or on the inclusion of companies that meet some corporate social responsibility (CSR) criteria. The aim of this chapter is thus to contribute to the academic debate investigating whether the ESG rating can serve as a proxy of companies (and stocks) that react better to financial turmoil. In other words, are companies recognized by independent evaluators as being more respon- sible also recognized by investors as being the most attractive during market shocks?