PT - JOURNAL ARTICLE AU - Timothy Adler AU - Mark Kritzman TI - The Cost of Socially Responsible Investing AID - 10.3905/JPM.2008.35.1.52 DP - 2008 Oct 31 TA - The Journal of Portfolio Management PG - 52--56 VI - 35 IP - 1 4099 - https://pm-research.com/content/35/1/52.short 4100 - https://pm-research.com/content/35/1/52.full AB - 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