TY - JOUR T1 - The Cost of Socially Responsible Investing JF - The Journal of Portfolio Management SP - 52 LP - 56 DO - 10.3905/JPM.2008.35.1.52 VL - 35 IS - 1 AU - Timothy Adler AU - Mark Kritzman Y1 - 2008/10/31 UR - https://pm-research.com/content/35/1/52.abstract N2 - In this article, the authors estimate the cost of practicing socially responsible investing. Using these results, investors may determine whether imposing restrictions on the available investment universe is the most cost-efficient method for promoting the particular social ideal. The authors design and execute a Monte Carlo simulation to compare the performance of a skillful investor in an unrestricted investment universe with the performance of the same investor in a restricted investment universe. They repeat this for a variety of skill levels and investment universes and find that the cost of socially responsible investing is substantial for even moderately skilled investors.TOPICS: ESG investing, accounting and ratio analysis, in markets ER -