Financial Performance of Socially Responsible Investment in Morocco

Abstract

Nowadays, socially responsible investment is the most popular form of sustainable finance and is attracting more and more so-called “committed” or “socially responsible” investors. By analyzing the results of previous studies on the impact of SRI on investors' financial performance, our research aims to verify whether the integration of ESG criteria leads to outperformance or underperformance relative to the Casablanca stock market index (MASI) and to observe whether there is an arbitrage opportunity between SRI and traditional investment on the Casablanca Stock Exchange. The empirical methodology is based on quantitative and financial simulations. Our results show that socially responsible investment outperforms the stock market index and the “traditional” financial asset portfolio in the short, medium, and long term.