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ERIC Number: ED559300
Record Type: Non-Journal
Publication Date: 2013-Sep
Pages: 17
Abstractor: ERIC
ISBN: N/A
ISSN: N/A
EISSN: N/A
From SRI to ESG: The Changing World of Responsible Investing
Caplan, Lauren; Griswold, John S.; Jarvis, William F.
Commonfund Institute
Thoughtful investment professionals continue to debate whether a portfolio's long-term performance can be enhanced by including environmental, social, and governance (ESG) considerations in the security selection process, but responsible investing is more than a passing trend. The terms socially-responsible investing, mission-related investing, impact investing, and environmental, social, and governance investing--all frequently grouped under the heading of responsible investing--have become a familiar part of the vocabulary of institutional and retail investors. Just what these terms mean in practice, however, and how their practitioners' claims can be impartially assessed, has been less clear. The goal of this paper is to provide a road map to the responsible investing landscape for governing boards and committees who are considering whether and how to integrate environmental, social, and governance factors into their investment process. The authors begin with a review of the principal categories of responsible investing, and assess the way in which the world of responsible investing has moved from a practice of negative screening and exclusion of certain types of investment to one of seeking or encouraging certain characteristics in portfolio companies. They offer their views in: Part I: Responsible Investing: Terminology and Background; Part II: Common Concerns about Responsible Investing; and Part III: Integration of ESG Factors: Some Practical Steps. The responsible investing landscape is changing. Formerly limited to SRI processes characterized by negative screens, responsible investing now sees an increasing emphasis on research techniques that emphasize positive environmental, social, and governance factors. Strengthening the intellectual case for ESG is the recognition by lawmakers and regulators that ESG analysis can be consistent with, or even bolster, traditional fiduciary responsibilities.
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Publication Type: Reports - Evaluative
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Commonfund Institute
Grant or Contract Numbers: N/A