Sustainable Investment and Corporate Governance Working Papers, Sustainable Investment Research Platform
No 2010/3:
Socially Responsible Investment and Fiduciary Duty: Putting the Freshfields Report into Perspective
Joakim Sandberg ()
Abstract: A critical issue for the future growth and impact of
socially responsible investment (SRI) is whether institutional investors
are legally permitted to engage in it – in particular whether it is
compatible with the fiduciary duties of trustees. An ambitious report from
the United Nations Environment Programme’s Finance Initiative (UNEP FI),
commonly referred to as the ‘Freshfields report’, has recently given rise
to considerable optimism on this issue among proponents of SRI. The present
paper puts the arguments of the Freshfields report into some further both
empirical and critical perspective, however, and suggests that its findings
do not call for very much optimism. The general argument is that while the
understanding of fiduciary duty outlined by the Freshfields report seems to
allow institutional investors to at least sometimes take some social or
environmental considerations into account, the support it gives for SRI is
notably contingent and, furthermore, it seems to rule out exactly the kind
of SRI which proponents of social responsibility and environmental
sustainability should hold in highest regard – proactive cases and socially
effective investment strategies. If SRI is to become an important force for
corporate social responsibility through its adoption by institutional
investors, then, it is suggested that legal reform is needed.
Keywords: Socially Responsible Investment; Fiduciary Duty; (follow links to similar papers)
20 pages, February 15, 2010
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
sirpwp10-03-Sandberg.pdf?attredirects=0 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Pontus Cerin ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joakim Ekebom
