The maturing of socially responsible investment: a review of the developing link with corporate social responsibility

This paper reviews the development of
socially responsible investment (SRI) over recent years
and highlights the prospects for an increasingly strong
connection with the practice of corporate social responsibility. The paper argues that not only has SRI grown
significantly, it has also matured. In particular, it has become an investment philosophy adopted by a growing
proportion of large investment institutions. This shift in
SRI from margin to mainstream and the position in which institutional investors find themselves is leading to
a new form of SRI shareholder pressure. Although this
bears some resemblance to lobbying campaigns which
might take advantage of shareholder rights, we seek to
distinguish it as an important phenomenon in its own
right – one to which corporate executives are likely to be
paying increasing attention in the years to come. We
further argue that this approach potentially meets some of
the earlier ethical criticisms of certain forms of SRI but,
ironically, probably owes its existence to those pioneering
approaches. We conclude with some suggestions for
further research to inform discussion of the issues highlighted in the paper.