Socially and environmentally responsible investment

This chapter, which draws on my long-standing scholarship in this field, examines how the financial sector shapes the environmental performance of the economy, focusing on the ebullient movement for socially responsible investing (SRI). The principal thesis is that the financial sector has generally negative environmental connotations, both in its own right and in regard to the companies it funds, and so far SRI’s influence on improving the sector’s impact has been modest but is improving. The role of legal governance in facilitating and hindering SRI is assessed as a variable relevant to the influence of SRI.