Socially Responsible Investment Law: Regulating the Unseen Polluters

Abstract

This new book argues that environmental law must target the financial sector, which sponsors and profits from environmental pillage. The rise of a system of finance capitalism has made the financial sector a crucial economic sector. A long-standing movement for socially responsible investment (SRI) has recently begun to advocate environmental standards for financiers. While the SRI movement has gained more influence in recent years, it has come at the price of jettisoning its former emphasis on ethical investment in favour of an instrumental business case approach. Some modest legal reforms to improve the quality and extent of SRI have yet to make a tangible difference. An alternative legal strategy to promote SRI for environmental sustainability is suggested based on reforming the fiduciary duties of financial institutions. Fiduciary duties tied to concrete performance standards such as sustainability indicators provide a way to restore the ethical imperatives of SRI.

Keywords: Socially responsible investment, ethics, sustainable development, financial regulation, environmental law

JEL Classification: E44, E62, G15, G23, G28, G38, K22, K32, N20, O16