Universal Investors and Socially Responsible Finance: A Critique of a Premature Theory

Banking and Finance Law Review, volume 30 (2015): 405-455

51 Pages Posted: 3 Feb 2016 Last revised: 19 Feb 2016

See all articles by Benjamin J. Richardson

Benjamin J. Richardson

University of Tasmania - Faculty of Law

Maziar Peihani

National University of Singapore (NUS) - Centre for Banking and Finance Law (CBFL)

Date Written: July 1, 2015

Abstract

This article investigates the theory of universal investors and their ability to be agents for socially responsible investing (SRI), with particular regard to the Canadian context. The influential theory depicts large financial institutions as motivated to reduce the social and environmental externalities of economic development that may affect the value of their investment portfolios. The theory, as both a description of how such institutions behave and a normative guide to how they should, is somewhat premature. This article assesses the strengths and limitations of the theory, surveys the putative SRI practices of some major Canadian financial institutions, and makes recommendations to improve the relevance and impact of the theory of universal investing.

Keywords: universal investors; socially responsible investing; fiduciary duty; law

JEL Classification: K22

Suggested Citation

Richardson, Benjamin J. and Peihani, Maziar, Universal Investors and Socially Responsible Finance: A Critique of a Premature Theory (July 1, 2015). Banking and Finance Law Review, volume 30 (2015): 405-455. Available at SSRN: https://ssrn.com/abstract=2726381

Benjamin J. Richardson (Contact Author)

University of Tasmania - Faculty of Law ( email )

Private Bag 89
Hobart, Tasmania 7001
Australia

HOME PAGE: http://www.utas.edu.au/law

Maziar Peihani

National University of Singapore (NUS) - Centre for Banking and Finance Law (CBFL) ( email )

Singapore

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
97
Abstract Views
494
rank
280,919
PlumX Metrics