Socially responsible and sustainable investing : a review and appraisal

Abstract

The financial industry is witnessing a consumer-driven phenomenon as today’s shareholder activists and venture capitalists are increasingly investing in financial assets that could be considered as socially responsible investments (SRI). In this light, this paper provides a background and explains how the market for responsible investments has evolved during the last few decades. At the same time, it reports that there are many researchers in the realms of business ethics that are focusing their attention on responsible investments. Therefore, this contribution reviews and appraises the extant theoretical underpinnings revolving on SRI as it engages with related debates, involving positive impact investment approaches, shareholder advocacy and engagement, sustainable investments, community investing and government controlled funds. It analyses these financial products’ contribution to societal development. Afterwards, it makes reference to socially responsible contractors and research firms that are increasingly specialising in the collection of environmental, social and governance (ESG) information, screening analyses and benchmarking of corporate responsible behaviours. This paper presents the opportunities and challenges for SRI. Finally, this research identifies future research avenues to academia in this promising field of study.