Edited by Kate Miles
Chapter 21: Socially and environmentally responsible investment
The financial sector influences the environmental performance of the economy, often in harmful ways. Through the global movement for socially responsible investing (SRI), the influence of financial institutions is being reoriented in a more positive direction. Their pathways of influence, such as divestment, corporate engagement, impact investing and voluntary codes of conduct, give modest leverage over the environmental activities of the companies supported by the financial sector. The SRI sector has yet to address the systemic and structural features of the financial economy, as against merely the environmental or social behaviour of individual investors or companies. Social investors should also target government regulators and international lawmakers to introduce better environmental laws, such as a carbon tax, and should also lobby for law reform to improve the regulatory milieu for SRI itself, such as by overhauling fiduciary and trusts law that at present can impede action by some institutional investors.
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