Financial markets: A tool for social responsibility? [Book Review]
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 52 (1):59-71 (2004)
Objectives of socially responsible investment (SRI) are discussed with reference to the two main mechanisms of the SRI ‘movement’: shareholder advocacy and managed investments. We argue that in their current forms, both mechanisms lack the power to create significant corporate change. Shareholder advocacy has been largely unsuccessful to date. Even if resolutions were successful, shareholder advocacy may still be ineffective if underlying economic opportunities remain. Marketing material and investment prospectuses issued by socially responsible mutual funds (SRI funds) commonly contain the claim that, by affecting corporations' access to capital funding, SRI funds can change corporate practices. This paper makes a contribution by presenting the market share of SRI funds in the regions where they are most developed, being Europe, the U.S. and Australia, to show that this claim is unlikely to eventuate. SRI funds also commonly claim that they will outperform conventional active mutual funds. That the economic performances of both are similar might be explained by their similar portfolio compositions. The paper makes an innovation in the SRI literature by adopting a legitimacy framework to explain the continued presence of SRI funds. To achieve desired social and environmental outcomes, SRI funds are urged to address issues at a more systemic level. A suggested mechanism is the collective lobbying of corporations and, especially, governments.
|Keywords||socially responsible investment ethical investment shareholder activism mutual funds managed funds legitimacy|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Klaus-Michael Menz (2010). Corporate Social Responsibility: Is It Rewarded by the Corporate Bond Market? A Critical Note. [REVIEW] Journal of Business Ethics 96 (1):117-134.
Carmen Juravle & Alan Lewis (2008). Identifying Impediments to Sri in Europe: A Review of the Practitioner and Academic Literature. [REVIEW] Business Ethics 17 (3):285–310.
Joakim Sandberg (2011). Socially Responsible Investment and Fiduciary Duty: Putting the Freshfields Report Into Perspective. [REVIEW] Journal of Business Ethics 101 (1):143-162.
William R. Pasewark & Mark E. Riley (2010). It's a Matter of Principle: The Role of Personal Values in Investment Decisions. [REVIEW] Journal of Business Ethics 93 (2):237 - 253.
Steven Daskal (2013). Saving for Retirement Without Harming Others. Journal of Business Ethics 113 (1):147-156.
Similar books and articles
Jacquelyn E. Humphrey & Darren D. Lee (2011). Australian Socially Responsible Funds: Performance, Risk and Screening Intensity. [REVIEW] Journal of Business Ethics 102 (4):519-535.
D. Bruce Johnsen (2003). Socially Responsible Investing: A Critical Appraisal. [REVIEW] Journal of Business Ethics 43 (3):219 - 222.
Jacob Park (2005). Beyond Good Intentions. International Corporate Responsibility Series 2:101-108.
Angeles Fernandez-Izquierdo & Juan Carlos Matallin-Saez (2008). Performance of Ethical Mutual Funds in Spain: Sacrifice or Premium? [REVIEW] Journal of Business Ethics 81 (2):247 - 260.
Francisco Climent & Pilar Soriano (2011). Green and Good? The Investment Performance of US Environmental Mutual Funds. Journal of Business Ethics 103 (2):275-287.
Greig A. Mill (2006). The Financial Performance of a Socially Responsible Investment Over Time and a Possible Link with Corporate Social Responsibility. Journal of Business Ethics 63 (2):131 - 148.
Karen L. Benson, Timothy J. Brailsford & Jacquelyn E. Humphrey (2006). Do Socially Responsible Fund Managers Really Invest Differently? Journal of Business Ethics 65 (4):337 - 357.
Jonas Nilsson (2008). Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior. [REVIEW] Journal of Business Ethics 83 (2):307 - 325.
Javier Gil-Bazo, Pablo Ruiz-Verdú & André A. P. Santos (2010). The Performance of Socially Responsible Mutual Funds: The Role of Fees and Management Companies. [REVIEW] Journal of Business Ethics 94 (2):243 - 263.
Josep M. Lozano, Laura Albareda & M. Rosario Balaguer (2006). Socially Responsible Investment in the Spanish Financial Market. Journal of Business Ethics 69 (3):305 - 316.
Added to index2009-01-28
Total downloads14 ( #120,567 of 1,102,043 )
Recent downloads (6 months)2 ( #192,049 of 1,102,043 )
How can I increase my downloads?