Mobilizing SRI through investor governance networks: The politics of collective investor action

Abstract

Purpose

This purpose of this chapter is to explore the political significance of modern socially responsible investing, specifically the emergence of investor governance networks (IGNs) and the collective activism of investors.

Design/methodology/approach

The research for this analysis is based upon insights and methodologies from political science, specifically within international relations and the constructivist theoretical approach. Investor networks are explored as social phenomena, an expression of changing values, and the contested realm of contrasting norms within the financial sector.

Findings

The chapter shows that the development of investor networks have followed a three-stage historical progression of emergence, transformation, and expansion. The increasing collective action by investors manifest in the creation of IGNs reflects the political nature of socially responsible investment in a world where governments are reluctant to lead and act on issues of importance to all citizens, not just investors. As such, these networks are part of the emerging global public domain, a transnational arena of discourse, contestation, and action where investors play a crucial role in articulating what is acceptable behavior by corporations.

Originality

The research in this chapter explores a particular aspect of socially responsible investment – the mobilization of collective action by investors – as a political phenomena, not just as an economic one, that has evolved over time. Very little research into SRI has been done from a political science perspective, contextualizing the rise of such investment as the confluence of collective action by increasingly powerful political actors in society. As such, the chapter has value to both scholars and observers of SRI because it emphasizes that the mobilization of investor networks results from broader societal dynamics that should not be underestimated by financial specialists and citizens alike.

Citation

MacLeod, M.R. (2014), "Mobilizing SRI through investor governance networks: The politics of collective investor action", Socially Responsible Investment in the 21st Century: Does it Make a Difference for Society? (Critical Studies on Corporate Responsibility, Governance and Sustainability, Vol. 7), Emerald Group Publishing Limited, Leeds, pp. 23-42. https://doi.org/10.1108/S2043-905920140000007000