Socially Responsible Investment and Fiduciary Duty: Putting the Freshfields Report into Perspective

Sandberg, Joakim

doi:10.1007/s10551-010-0714-8

Cited by 103 publications

(67 citation statements)

References 35 publications

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“…In their early assessment of the potential of engagement, Sparkes & Cowton (: 54) argue that engagement by institutional investors ‘is likely to prove the most powerful way in which [socially responsible investment] will influence corporate executives to engage in corporate social responsibility’. Similar sentiments can be found in later studies, suggesting that engagement is particularly ‘proactive’ or that ‘shareholder activism is the most progressive option for institutional investors’ (Sandberg : 157). Ransome & Sampford (: 112) contend that ‘[o]ne powerful reason in favour of engagement over … screening is that it is more likely to be effective, because it entails direct involvement in an attempt to cause change.’ Louche & Lydenberg (: 77) argue that exit and engagement ‘can gain in effectiveness if used in combination’.…”

Section: Third Claim: Engagement With Exclusion Is Always More Effectsupporting

confidence: 71%

Three questions about engagement and exclusion in responsible investment

Kolstad

2015

Bus Ethics Eur Rev

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There is a move towards more use of engagement strategies in responsible investment. This change in strategies is motivated by a number of claims about the effectiveness of engagement versus exclusion of companies from the investment universe (the set of investment objects available to an investor). This paper examines the basis for three central claims: (1) That engagement, in contrast to exclusion, does not reduce the investment universe; (2) That exclusion reduces an investor's influence on a company; and (3) That engagement with exclusion is necessarily a more effective means of influencing companies than pure exclusion. All three claims are argued to be open to challenge. It is possible that the move towards more engagement reflects bureaucratic incentives and political considerations among institutional investors, rather than arguments about the effectiveness and efficiency of engagement.

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Section: Third Claim: Engagement With Exclusion Is Always More Effectsupporting

confidence: 71%

Three questions about engagement and exclusion in responsible investment

Kolstad

2015

Bus Ethics Eur Rev

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“…RI literature has recognized the long-standing issue concerning the legal obligation to invest the assets of the pension fund solely in the interests of plan beneficiaries, in essence, driving the investing towards a ''maximizing return'' and ''minimizing risk'' portfolio management strategy. Until recently, this fiduciary duty has frequently been offered as a barrier to RI investing by pension funds, but the debate is not yet completely settled (Sandberg 2011). Even though the status of RI investing from a legal perspective may be arguably resolved, certain practices have emerged out of this obligation that continue to themselves act as challenges to the effective implementation of RI investments.…”

Section: The Compliance Domain Of Pension Fund Investments In Canadamentioning

confidence: 99%

Responsible Investing of Pension Assets: Links between Framing and Practices for Evaluation

Himick

Audousset-Coulier

2015

J Bus Ethics

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Despite the increase in the acceptance of responsible investing (RI) in general (Allianz, in www. allianzglobalinvestors.com, 2010), the global community is still witnessing unprecedented levels of practices that can only be categorized as ''unsustainable''. It appears, then, that either the inroads made by the RI community have not kept up with the increase in unsustainable practices, or, that the RI process itself has been ineffective at producing meaningful change. The current study aims to investigate the practices used by pension plan sponsors to determine how they may enable, or interfere with, the adoption of implementation of RI. We adopt Framing Theory (Benford and Snow, Annual Review of Sociology 26: 2000), specifically the idea that particular frames find alignment when they resonate with their targets, by either bridging, extending, amplifying or transforming a domain. We extend research to include understudied practices by performing an analysis of 60 public pension funds in Canada. We find evidence of disconnect between the financial frame which dominates practices for compliance and evaluation, and the social frame of RI as a source of change. If the aim of RI is to produce long-term change, then a consideration of whether it aligns with extant practices is critical. We discover a variety of frame alignment tactics already employed in practice. We also find that, even within the dominant financial frame, opportunities for frame extension, amplification and transformation do exist, and examine how these are more (or less) possible depending on how the asset management structure is designed.

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“…1 Illustrative examples for the most common themes are provided below-with more examples shown in appendix A. The issue of fiduciary duty and SRI investment has been explored [35,36] especially in relation to the United Nations Environment Programme's Finance Initiative (UNEP FI), commonly known as the Freshfields Report. It supports that fiduciary duty is often cited as the reason why environmental and SRI issues are not taken into account in investment decisions.…”

Section: Resultsmentioning

confidence: 99%

An exploratory investigation of barriers and enablers affecting investment in renewable companies and technologies in the UK

et al. 2013

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The last few years have seen considerable research expenditure on renewable fuel technologies. However, in many cases, the necessary sustained and longterm funding from the investment community has not been realized at a level needed to allow technologies to become reality. According to global consulting firm Deloitte's recent renewable energy report (http://www.deloitte. com/energypredictions2012), many renewable energy projects stalled or were not completed because of issues including the global economy, the state of government finances, difficulties in funding and regulatory uncertainty. This investigation concentrates on the funding aspect and explores the perceived barriers and enablers to renewable technologies within the investment and renewables community. Thematic analysis of 14 in-depth interviews with representatives from renewable energy producers, banks and investment companies identified key factors affecting the psychology of investor behaviour in renewables. Eight key issues are highlighted, including a range of barriers and enablers, the role of the government, balance between cost/risk, value/return on investment, investment time scales, personality/ individual differences of investors and the level of innovation in the renewable technology. It was particularly notable that in the findings the role of the government was discussed more than other themes and generally in quite critical terms, highlighting the need to ensure consistency in government funding and policy and a greater understanding of how government decisionmaking happens. Specific findings such as these illustrate the value of crossing disciplinary boundaries and highlight potential further research. Behavioural science and economic psychology in particular have much to offer at the interface of other disciplines such as political science and financial economics.

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Socially Responsible Investment and Fiduciary Duty: Putting the Freshfields Report into Perspective

Abstract: ethical investment, fiduciary duty, Fresh-fields report, institutional investors, legal reform, prudent investor rule, social effectiveness, socially responsible investment, United Nations Environment Programme Finance Initiative,

Cited by 103 publications

References 35 publications

Three questions about engagement and exclusion in responsible investment

Three questions about engagement and exclusion in responsible investment

Responsible Investing of Pension Assets: Links between Framing and Practices for Evaluation

An exploratory investigation of barriers and enablers affecting investment in renewable companies and technologies in the UK

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