Green or socially responsible investing (SRI) refers to making investment decisions according to both financial and ethical criteria. This paper explores the effects of ethical screening on the investment decisions of firms that fail the screen (‘polluting’ firms) and on their decisions to...

We model a capital market in which some proportion of investors get utility from owning firms that undertake spending on corporate social responsibility (CSR). We also assume different categories of firms: those with good CSR fundamentals and those with poor CSR fundamentals. We develop an...