Reforming Climate Finance through Investment Codes of Conduct

Whether environmentally conscious investors can help abate climate change, and thereby put the economy on more sustainable foundations, is an important question for policy-makers to consider. The long-standing movement for socially responsible investment (SRI), which seeks to harness the resources and power of the financial sector as a catalyst to change corporate social and environmental behavior, has become increasingly concerned about a warming climate. The SRI movement not only seeks to target individual corporate polluters through divestment, shareholder activism, and other mechanisms of pressure; but it has also begun to promote a framework for more systemic change through the propagation of various investment codes of conduct. 1 Some of these codes specifically address global warming, such as the Climate Principles and the Carbon Disclosure Project, while others seek to promote SRI more generally, such as the United Nations Principles for Responsible Investment. 2 This Article assesses the contribution of SRI to climate change and in particular critiques whether the new SRI codes of conduct offer an effective way of improving how investors respond to global climate change issues.