Is Socially Responsible Investment a Success?

24th May 2018, Prof. Bert Scholtens (Groningen University) gives a keynote speech at the final Jean Monnet workshop on Socially Responsible Investments in Pisa.

He asks whether socially responsible investing could be regarded as a success. The answer depends upon the perspective taken. There is evidence that investors increasingly account for environmental, social and governance (E, S, G) issues in their decision making and that now this type of investing is about one third of total assets under management. They use a wide range of strategies for doing so. Business, policy makers, and academic institutions have arranged several networks and platforms to discuss and advance responsible investing. The UN’s Sustainable Development Goals show where to go. So, this suggests one can qualify responsible investing as a success. However, it is not very clear what responsible investing actually constitutes and the data quality regarding responsible investing is rather poor. There is little theory or basic notion about how and why firms exactly impact on social and environmental well-being. As a result, it is not clear at all how the ESG ratings inform the investor – and the public in general – about how responsible or irresponsible a particular activity, firm, industry or country actually is.