A plea for a stronger role of non-financial impact in the socially responsible investment discourse

Diener, Joel; Habisch, André

doi:10.1108/cg-01-2020-0039

Cited by 11 publications

(16 citation statements)

References 66 publications

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“…We aim to assess disclosure related to CC by the bigger European banks (those that are required to publish the non-financial statement (NFS) according to Directive 95/2014/EU), to understand whether banks, traditionally characterized by a risk-oriented culture, have been able to grasp the most innovative aspects of the TCFD recommendations in terms of both the risks and opportunities of CC and a forward-looking perspective in the management of this issue. We focus on the European context because, more than others, it represents a context with stringent regulation in terms of emissions and attention to CC issues (Diener and Habisch, 2021; Schiemann and Sakhel, 2019). Europe has placed environmental sustainability at the heart of its strategy by proposing several reforms aimed at achieving climate goals by 2050 (Zhang, 2021).…”

Section: Introductionmentioning

confidence: 99%

Sustainable governance and climate-change disclosure in European banking: the role of the corporate social responsibility committee

Cosma

Principale

Venturelli

2022

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Purpose The purposes of this paper are: firstly, to assess the disclosure related to climate change (CC) by major European banks to understand if the banks have grasped the most substantive aspects of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and secondly, to evaluate the contribution of a non-traditional committee (i.e. corporate social responsibility (CSR) committee) to TCFD-compliant disclosure. Design/methodology/approach Using content analysis and ordinary least squares regressions on a sample of 101 European banks, this study sought to investigate completeness, tone and forward-looking orientation of CC disclosure and explore the relationships between CSR committee and previous disclosure aspects. Findings This study shows that European banks have been able to reach an intermediate level of adequacy of compliance in terms of completeness of information but forward-looking orientation seems to be the aspect that needs the most improvement. The existence of a CSR committee dedicated to sustainability issues seems to constitute the difference between the banks in terms of disclosure. The results highlight vulnerabilities in disclosure and board characteristics relevant for improving CC disclosure. Practical implications Firms interested in strengthening stakeholder engagement and capturing strategic opportunities involved in CC should be encouraged to establish a CSR committee and appoint female directors in financial companies. This paper should be of interest to policymakers, governance bodies and boards of directors considering the initiative of corporate sustainable governance complementary to Directive 2014/95/EU on non-financial reporting by the European Commission. Originality/value To the best of the authors’ knowledge, no prior study has investigated the relationship between the CSR committee and the application of the TCFD’s recommendations in the European banking industry.

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Section: Introductionmentioning

confidence: 99%

Sustainable governance and climate-change disclosure in European banking: the role of the corporate social responsibility committee

Cosma

Principale

Venturelli

2022

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“…Regulators such as the EU Commission might want to start taking into account the impact that an investment generates, not just follow the purity claims that ESG hermits carry before them like a monstrance. The EU taxonomy, which currently leaves out the transformation aspects (Diener and Habisch 2021) and rates companies only according to the status quo, is therefore going in the wrong direction, in our opinion. Our findings may also encourage fund providers who want to make a difference to reconsider their exclusion or best-in-class strategy and turn to methods that are empirically proven to deliver investor impact.…”

Section: Discussion and Future Researchmentioning

confidence: 90%

Developing an Impact-Focused Typology of Socially Responsible Fund Providers

Diener

Habisch

2022

JRFM

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The concept of investor impact of socially responsible investments is relatively new. Our article expands knowledge in this field by analyzing how investor impact is implemented in the ethical investment policies of 45 providers of publicly traded, socially responsible funds. Based on a typological content analysis, we first develop an impact-focused category system, which in the second step is used to distinguish three types of fund providers: ESG hermits, ESG ambassadors and ESG evangelists. Our results suggest that socially responsible fund providers with a stronger impact orientation, such as ESG evangelists, also employ strategies that are more likely to achieve investor impact. In contrast, fund providers with a weaker impact orientation, such as ESG hermits, focus more on purity aspects and therefore tend to utilize strategies that defend the purity claim but also show a weaker investor impact.

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“…For our search, the terms SDG and sustainable development are used as synonyms, following authors who consider the 2030 Agenda a genuine social engagement to achieve worldwide sustainable development (Diez-Cañamero et al, 2020), the most important framework for global development (van Zanten & van Tulder, 2018) and the SDGs as the benchmark for responsible investors (Diener & Habisch, 2020).…”

Section: Abstract and Searchmentioning

confidence: 99%

“…Institutional momentum and the growing demand for sustainable investment products have led SI assets under management to USD 35.3 trillion in 2020, a growth of 15% in two years, equating to 36% of all professionally managed assets worldwide (GSIA, 2020). Despite this expansion, many fear that this prevalence has not been reflected efficiently in sustainability achievements (Diener & Habisch, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…Friede (2019) carried out an extensive meta-synthesis of 112 studies to analyze ESG factor integration impediments, identifying 161 topics subsumed in a four-pillar framework: market-, firm-, regulatory-, and individual-based impediments. Diener and Habisch (2020) attributed the limited sustainability achievements to the emphasis on financial aspects in SI theory and practice. They proposed a more equilibrated SI with the growing presence of non-financial information.…”

Section: Introductionmentioning

confidence: 99%

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Contribution of sustainable investment to sustainable development within the framework of the SDGS: the role of the asset management industry

Folque

Escrig-Olmedo

Santamaría

2022

SAMPJ

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Purpose This study aims to understand how scholarly research addresses sustainable investments’ contribution to sustainable development (SD) within the sustainable development goals (SDG) framework. This is achieved by focusing on how the asset management industry, through the practice of advanced sustainable investment strategies, can contribute more efficiently to SD. Design/methodology/approach For this purpose, a systematic literature review using the content analysis method and comprised between the years 2015 and 2021 is carried out. Findings A systematic literature review shows that the asset management industry is critical to integrating SDGs in financial markets, through their influence on investee companies or their investment products. The findings also indicate that SDGs are integrated into investment portfolios, particularly those managed according to the impact investment strategy and those that practice active ownership. However, the integration is not homogeneous. Research limitations/implications This review has limitations derived from search engineering. In addition, research goals have conditioned the exclusion of articles that merely refer to the SDGs. Moreover, since SDGs were launched in 2015, not enough time has elapsed to analyze the total contribution of sustainable investment to achieving the SDGs. Practical implications This study provides the basis for a multidisciplinary debate related to developing a good integration of SDGs in the asset management industry under new global challenges. Social implications Given the disconnection between the expansion of sustainable investment and sustainability achievements, this research aims to deepen the understanding of how sustainable investment can contribute more efficiently to SD within the framework of SDGs. Originality/value This analysis advances previous academic research by providing insights into new pathways for future studies on how to approach the asset management industry's challenges to contribute to sustainable development efficiently in the current context.

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A plea for a stronger role of non-financial impact in the socially responsible investment discourse

Cited by 11 publications

References 66 publications

Sustainable governance and climate-change disclosure in European banking: the role of the corporate social responsibility committee

Sustainable governance and climate-change disclosure in European banking: the role of the corporate social responsibility committee

Developing an Impact-Focused Typology of Socially Responsible Fund Providers

Contribution of sustainable investment to sustainable development within the framework of the SDGS: the role of the asset management industry

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