Most investment today is conducted by a relatively small number of institutional investors – pension funds and investment managers – who manage the pensions and saving funds of millions of ordinary people. The manner in which these institutional investors invest and discharge their responsibilities as the owners of companies is, therefore, of critical importance to society as a whole.
In recent years, some of the biggest institutional investors have actively encouraged companies to improve their management of social, ethical and environmental issues. A number have also sought to explicitly analyse companies' performance on these issues and to incorporate this analysis into investment decision-making. These activities have contributed to important changes: a number of companies have committed to stabilising or reducing greenhouse gas emissions from their activities and operations, labour conditions in many retail supply chains have improved significantly, and many companies have significantly improved their governance of corporate responsibility issues.
However, to date, there has been little systematic analysis of fundamental questions such as: Do responsible investment strategies systematically result in improvements in the social, ethical and environmental performance of companies? To what extent is it in investors' interest to encourage higher standards of corporate responsibility? Do responsible investment strategies enhance financial performance for investors?
In this ground-breaking collection, Rory Sullivan and Craig Mackenzie have brought together some of the leading practitioners and commentators in the field of responsible investment to explore these questions. The contributors to this book present their views on the practicalities of implementing responsible investment strategies, the outcomes that have been achieved, the practical issues and barriers faced in implementing such strategies, and the challenges to be faced if responsible investment is to become a mainstream investment approach. The results are both unique and surprising.
This book will be mandatory reading for all those involved in the field of social and environmentally responsible investment, corporate governance and corporate social responsibility whether they be academics, researchers or practitioners.
An impressive and wide-ranging list of contributing writers advance a balance between elucidating the strengths of socially responsible investing while also exposing its weaknesses ... On first glance, the most impressive aspect of Responsible Investment is its list of contributors ... [The] editors are to be applauded not only for corralling such a wide-ranging, intelligent, and experienced group of writers, but also for a more subtle aspect of this indispensable volume ... [they] frame the book with a set of questions, including whether SRI actually improves corporate governance, social, ethical, and environmental (GSEE) performance, and whether SRI enhances financial performance for investors. While the second question has received much attention, the first question, which really gets at the fundamental foundation of SRI, has slipped under the radar. Read the full review - Bill Baue, SocialFunds.com.
The leading SRI thinkers at Insight, Morley, Innovest, Goldman Sachs and many more have pooled their latest thinking in this important book. The editors have marshalled a range of perspectives on the "why" and "how" of investor responsibility. Each contributor gives a clear elucidation of their house style. Case studies show how they go about their job in practice. Each one illustrates the processes being used to analyse stockmarket implications of social issues. This is the most detailed resource yet available on how SRI funds work in practice. - Corporate Citizenship Briefing, January 2007