Misadventures of An Irresponsible Investor

13 Pages Posted: 18 Sep 2012  

Jack Gray

University of Technology Sydney (UTS)

Date Written: September 17, 2012

Abstract

The ESG movement is nudging toward an unhealthy state of political correctness, one that brooks no criticism (and there is much, but mostly sotto voce). Boards spend excessive time on ESG relative to any expected benefits for the principals; managers cynically sign up to UNPRI else their business suffers; while principals, when given a choice, eschew the option. Nonetheless, ESG raises important questions about the very purpose of fiduciary investing, especially whether a pension fund has any social responsibility beyond generating the greatest risk-adjusted return for its beneficiaries. Jane Ambachtsheer, Stephen Davis, and Keith Johnston were invited to respond to Gray’s views. Their comments follow immediately after this article.

Keywords: ESG, Pension Fund, Social responsibility, Sole Purpose Test, Sustainability

Suggested Citation

Gray, Jack, Misadventures of An Irresponsible Investor (September 17, 2012). Rotman International Journal of Pension Management, Vol. 5, No. 2, 2012. Available at SSRN: https://ssrn.com/abstract=2147770 or http://dx.doi.org/10.2139/ssrn.2147770

Jack Gray (Contact Author)

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

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