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Socially responsible investing for sustainability: Overcoming its incomplete and conflicting rationales

Citation

Richardson, BJ, Socially responsible investing for sustainability: Overcoming its incomplete and conflicting rationales, Transnational Environmental Law, 2, (2) pp. 311-338. ISSN 2047-1025 (2013) [Refereed Article]

Copyright Statement

Copyright 2013 Cambridge University Press

DOI: doi:10.1017/S2047102513000150

Abstract

In the wake of the Global Financial Crisis and worsening collateral social and environmental problems, socially responsible investing (SRI) has garnered more interest internationally as a potential civilizing influence on the financial economy. In particular, SRI is increasingly conceptualized as a means to promote environmentally sustainable development by disciplining financial markets to be more attentive to their ecological impacts. In this sense, SRI emerges as a putative form of transnational governance that utilizes non-state actors and mechanisms to promote sustainability in an economic sector that traditionally has had little accountability for its environmental performance. But as a largely voluntary movement, with rudimentary legal support, SRI so far has wielded limited clout. A hindrance to the aspirations of SRI is deficiencies in its rationales. This article critiques the main theories advanced to justify SRI from the perspective of their contribution to promoting environmental sustainability: the complicity-based doctrine, leverage-based responsibility, and the universal owner thesis. Apart from gaps or limitations shown in each rationale, the article demonstrates that they conflict with the existing parameters of fiduciary law responsibility of financial institutions. An alternative rationale that emphasizes the temporal perspective to invest over the long term is suggested as a better approach for SRI if it is to be relevant to the pressing challenges of promoting sustainability and governing global financial markets.

Item Details

Item Type:Refereed Article
Research Division:Law and Legal Studies
Research Group:Law
Research Field:Environmental and Natural Resources Law
Objective Division:Law, Politics and Community Services
Objective Group:Community Service (excl. Work)
Objective Field:Environmental Services
Author:Richardson, BJ (Professor Benjamin Richardson)
ID Code:91818
Year Published:2013
Web of Science® Times Cited:7
Deposited By:Faculty of Law
Deposited On:2014-05-30
Last Modified:2017-12-14
Downloads:0

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