Reasonable Expectations and Fiduciary Obligations

Waitzer, Edward J.; Sarro, Douglas

doi:10.1093/acprof:oso/9780198785453.003.0016

Cited by 2 publications

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“…134 As financial intermediaries, institutional investors invest assets on behalf of their clients to whom they owe fiduciary duties of loyalty, obedience and care. 135 With few exceptions worldwide, the legal scope and content of these investor-based fiduciary duties with respect to human rights are weak and ambiguous. 136 Human rights due diligence, as applied to institutional investors, seeks to counter this passivity.…”

Section: Impact-maximizing Leveragementioning

confidence: 99%

Social Bonds for Sustainable Development: A Human Rights Perspective on Impact Investing

Park¹

2018

Bus. and hum. rights j.

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This article analyses the human rights implications of impact investing, which aims to create positive social and environmental impacts in addition to financial returns. Reflecting growing awareness of the capacity of the global capital markets to advance sustainable development, companies and institutional investors are seeking new financial instruments and strategies. This article focuses on social bonds, a prominent and illuminating example of this phenomenon. Social bonds are debt securities sold to investors whose proceeds are used to finance projects with a defined social benefit such as affordable housing, education, food security, and access to healthcare. To analyse social bonds in the context of human rights, this article proposes a framework for evaluating human rights factors in impact investing and applies it to the social bond market. It finds that current standards and practices do not adequately account for the human rights implications of social bonds. In light of these observations, this article suggests reforms to the social bond market that enhance investor assessment, external assurance, and impact-maximizing leverage.

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Section: Impact-maximizing Leveragementioning

confidence: 99%

Social Bonds for Sustainable Development: A Human Rights Perspective on Impact Investing

Park¹

2018

Bus. and hum. rights j.

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Fiduciary Obligations in Business and Investment: Implications of Climate Change

Sarra

2018

SSRN Journal

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The allocation of capital in business and investment have an impact on and are impacted by climate change. This paper suggests that fiduciary obligation, under both statutory provisions and the common law, requires directors and officers to identify and address climate change risk in fulfilling their obligations to act in the best interests of the company; and requires pension fund trustees and other fiduciaries to identify and address climate change risk in fulfilling their obligations to beneficiaries. Recent developments regarding statutory disclosure may be significant in drawing the attention of fiduciaries to climate change risk. To date, there is no jurisprudence in Canada that expressly clarifies fiduciary obligation and climate risk, but existing Supreme Court of Canada judgments make clear that the obligations of fiduciaries are contextual and broad enough to recognize such a duty. Market actors and other stakeholders would benefit from clarification by legislators regarding these obligations. A further avenue for holding directors accountable for failing to address climate adaptation and mitigation is statutory corporate law oppression remedies, available where directors act in a manner that is oppressive, unfairly prejudicial to, or unfairly disregard the interests of specified stakeholders. The reasonable expectations of stakeholders are a critically important factor, and the paper develops these ideas in respect of climate change financial risk. It suggests that the law as currently framed is a driver for positive action on climate change. What can and should fiduciaries do within the existing legal regime? How can challenges to trustee action be overcome? What should governments do through public policy, legislation and regulation to address barriers and drive greater action?

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Reasonable Expectations and Fiduciary Obligations

Cited by 2 publications

References 0 publications

Social Bonds for Sustainable Development: A Human Rights Perspective on Impact Investing

Social Bonds for Sustainable Development: A Human Rights Perspective on Impact Investing

Fiduciary Obligations in Business and Investment: Implications of Climate Change

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