Transforming Socially Responsible Investment: Lessons from Environmental Justice

Abstract

There is limited evidence that socially responsible investment (SRI) strategies can resolve persistent concerns brought up in scholarship on the industry, particularly as it relates to considerations of justice. It is critical that SRI initiatives be interrogated about their broader impacts on environmental inequality and justice in the context of global power relations. Drawing upon environmental justice (EJ) theory, we propose a framework for transformative investment to halt the exploitation of humans and environment in pursuit of profit. We posit that transformative investment initiatives, including those related to strategies of screening and shareholder resolutions, would reflect three general conditions of environmental justice. They would require (1) cumulative responsibility that focuses on holistic gains so that investment initiatives do not replace one harm with another; (2) embedded accountability that is rooted in the decision-making and concerns of directly impacted communities; and (3) counter-hegemonic practices that are integrated with broader strategies and movements that challenge structures of oppression and exploitation. Through these principles, we address problems with SRI that have already been identified in scholarship on the subject. Moreover, we draw upon Antonio Gramsci’s concept of ‘strategic power’ to conceptualize the conditions and actions necessary for transformative investment to take root.

Flattening or addressing complexity? The future role of GRI in light of the sustainability accounting (r)evolution

“…This attitude highlights the urgency for GRI to leverage autonomous forces in the direction of promoting diversity and the inclusion of different stakeholders (Brown and Dillard, 2015), ensuring justice by providing accounting information (Walker, 2016;Parker and Kohlmeyer, 2005;McKernan and MacLullich, 2004). The environmental justice theory and principles could inspire GRI to reduce inequalities by adopting a dialogic approach that includes stakeholder needs (Reynolds and Ciplet, 2023;Manetti et al, 2021). Nevertheless, GRI is heading in a number of parallel, contiguous but not overlapping directions, which could also leverage heteronomous hierarchization principles.…”

“…That accounting can act as a positive and transformative force in society (Gallhofer and Haslam, 2019), capable of capturing social changes and contributing to the realization of justice in a broad sense, has been widely debated in the literature (Walker, 2016; Parker and Kohlmeyer, 2005; McKernan and MacLullich, 2004). In the specific field of environmental justice, Reynolds and Ciplet (2023) draw on environmental justice theory to propose a framework for transformative accounting that requires cumulative accountability and counter-hegemonic practices of embedded accountability. In this regard, McKernan and MacLullich (2004) challenge the eminently normative origin of accounting, encouraging a movement toward communicative ethics (making room for the dialectic of love and justice), instead of an authority-driven force.…”

“…In the meantime, GRI should autonomously leverage its value-based role with respect to the sustainability field. Defining the role of standards in ensuring justice requires the use of theoretical foundational concepts (Reynolds and Ciplet, 2023), while defining the capital and reporting boundaries requires a theory of what an organization is (de Villiers et al , 2022; Malsch et al , 2011; Vakkuri and Johanson, 2020; Antonini and Larrinaga, 2017). GRI should enforce the autonomous principle of hierarchization in the sustainability field by empowering the sustainability culture and proposing additional technical tools to solve practical problems.…”