Understanding the governance structures that underpin responsible investment decision-making
MetadataShow full item record
The aim of this essay is to consider the extent to which best practice governance can be adapted to support effective responsible investment (RI) decision-making. Governance refers to the mechanisms and processes by which decision-making is managed. Best practice governance emphasizes institutional coherence, expertise and effective processes of deliberation (Clark and Urwin 2008). The essay focuses on institutional investors with long-term investments horizons, such as pension funds, endowments and sovereign wealth funds. As universal owners, it is widely held that these investors must incorporate relevant environmental and social issues into their investment decision-making to achieve their investment objectives. This essay argues that adding environmental and social dimensions to the already complex process of investment decision-making requires increasing and on-going investment in an investor’s own governance. The form of governance required depends on the perspective motivating an investor’s RI strategy. The literature can be divided broadly into two perspectives. The first perspective suggests that investors should limit their consideration to environmental, social and governance (ESG) issues that are underpinned by a sound business case in the form of a financial risk or opportunity. A second perspective suggests that financial risks and opportunities at the portfolio level cannot always meaningfully be separated from broader political, ethical and sustainability issues. This second perspective requires that investors adopt a more reflexive form of governance to understand how their own decision-making frameworks interact with and contribute to shaping risks and opportunities at the systems level.
DescriptionThis is a preprint version of an chapter published in Encyclopedia of Business and Professional Ethics. The final authenticated version is available online at: https://doi.org/10.1007/978-3-319-23514-1.
Showing items related by title, author, creator and subject.
Decision-making in United Nations peacekeeping operations : understanding the social processes that influenced decision-making in the United Nations mission in South Sudan from January to September 2014 Steeves, Jason Alan Mervyn (2019-03-19)The civil war that started in South Sudan in December 2013 changed the country and it changed the scale and scope of the United Nations mission that was there to assist it. The purpose of this research was to uncover how ...
Unknown author (Vancouver Island University, 2012-05)What are the practical implications of White & Bob and Morris for the exercise of jurisdiction by the Treaty First Nations and the Province of BC? What role exists for “Douglas Treaty” First Nation laws in regulating the ...
Baxter, Theresa (Canadian Institute of Planners, 1998-11)Local government decisions tend to reflect those who utilize power well and the prevailing ideology. This discussion presents two participants in the decision-making process in Calgary, Alberta - City planners and the ...