Corporate and Financial Leadership
Chapter 6: Socially responsible investment
Financial social responsibility is based on considerations of CSR in investment behavior. CSR is the basis for socially responsible investment (SRI) in screening, shareholder advocacy, community investing and social venture capital funding. As a multi-stakeholder phenomenon, SRI comprises economic, organizational and societal constituents. The emergence of SRI within the Western world can be traced back to a combination of historical incidents, legislative compulsion and stakeholder pressure. SRI is a context- and culture-dependent phenomenon. The UN provides an institutional framework to promote SRI and align multiple stakeholders’ views on SRI. As a special case of SRI, political divestiture is the withdrawal of investment from socially irresponsible market regimes with the greater goal of accomplishing socio-psychological changes. It is proposed that SRI stems from socio-psychological motives complementing rational profit maximization considerations.
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