MonULR-35(2)-6.pdf (231.15 kB)
Download file

Can Socially Responsible Investment Provide a Means of Environmental Regulation?

Download (231.15 kB)
journal contribution
posted on 29.10.2019, 08:45 by Benjamin J Richardson
The seemingly rapid growth of the market for socially responsible investment (‘SRI’) in Australia and other jurisdictions promises to make fi nancing decisions more accountable to social and environmental criteria. Indeed, the ability of fi nanciers to withhold funds and thereby hinder development, such as the decision of the Australia and New Zealand Banking Group Ltd in 2008 to shun fi nancing a Tasmanian pulp mill planned by Gunns Ltd, raises hopes that fi nancial institutions could act as surrogate environmental regulators. The long-standing SRI movement arose partly as an answer to the lacunae or weaknesses of offi cial regulation, providing a means by which ethical investors could challenge corporations partaking in socially egregious or environmentally irresponsible practices condoned by authorities. Yet, these aspirations appear to have been too ambitious. Lacking suffi cient market leverage, and reliant on relatively tame voluntary codes of conduct, paradoxically the success of the SRI movement increasingly relies on the state itself. SRI depends on weightier public policy reforms in such areas as economic incentives and fi duciary duties, although considerable uncertainty persists concerning which policy reforms could most effectively advance SRI. Concomitantly, reformers must justify why investment institutions should be held legally accountable to a higher standard than those fi rms they fi nance. Unless these barriers to SRI and its regulation are resolved, it is doubtful whether SRI in Australia or elsewhere can contribute signifi cantly to environmental governance.

History

Publication Date

2009

Volume

35

Issue

2

Type

Article

Pages

262–295

AGLC Citation

Benjamin J Richardson, ‘Can Socially Responsible Investment Provide a Means of Environmental Regulation?’ (2009) 35(2) Monash University Law Review 261

Usage metrics

Categories

Keywords

Exports