ISLAMIC BUSINESS PRINCIPLES, SOCIALLY RESPONSIBLE INVESTMENT AND PORTFOLIO PERFORMANCE. THE CASE OF PAKISTAN

Socially responsible investment has become prominent during the last few decades. It has different meaning in various cultures and religions. In western cultures, ethical, social, environmental and religious concerns affect investment decisions. In eastern and Islamic countries people do prefer their religious norms and believes while making financial decisions. Islamic law has patterned all those business activities in its rules and laws which are beneficial or harmful for society and human beings. Therefore Islamic business principles addresses these otherwise separately discussed concerns i.e. ethical, social, environmental and religious under the broad umbrella of business and investment rules. This study analyzed previous studies on socially responsible investment, its variation on cultural, religious basis and Islamic business principles concerned with portfolio performance. Previous studies have found close relation between responsible investment and portfolio performance. Finally this study discusses the performance of Islamic asset management funds in Pakistan.