To read this content please select one of the options below:

Increasing the effectiveness of SRI corporate engagement on climate change through a responsive regulation framework

Socially Responsible Investment in the 21st Century: Does it Make a Difference for Society?

ISBN: 978-1-78350-467-1, eISBN: 978-1-78350-468-8

Publication date: 7 July 2014

Abstract

Purpose

Socially responsible investment (SRI) engagement currently performs a variety of supportive regulatory functions such as reframing norms, establishing dialogue and providing resources to improve performance, however corporate responses are voluntary. This chapter will examine the potential gains in effectiveness for SRI engagement in a responsive regulatory regime.

Approach

Global warming is a pressing environmental, social and governance (ESG) issue. By using the example of climate change the effectiveness of SRI engagement actors and the regulatory context can be considered. This chapter builds the conceptual framework for responsive regulation of climate change.

Findings

SRI engagement may face resistance from corporations due to its voluntary nature and conflict with other goals. Legitimacy and accountability limit the effectiveness of SRI engagement functioning as a voluntary regulatory mechanism. This chapter argues that the effectiveness of SRI engagement on climate change could be enhanced if it served as part of a responsive regulation regime.

Practical implications

Engagement is used by SRIs for ESG issues. A comprehensive regulatory regime could enhance corporate adaptation to climate change through increasing compliance with SRI engagement. The implication for SRI practitioners is that lobbying for a supportive regulatory regime has a large potential benefit.

Social implications

Responsive regulatory policy involves both support and sanctions to improve compliance, enhancing policy efficiency and effectiveness. There are potentially large net social benefits from utilising SRI engagement in a regulatory regime.

Originality of chapter

In seeking to re-articulate voluntary and legal approaches this research addresses a gap in the literature on climate change regulation.

Keywords

Acknowledgements

Acknowledgements

This chapter has benefitted greatly from a sabbatical at The Carleton Centre for Community Innovation where I was graciously hosted by the Director, Tessa Hebb. My PhD research which prompted this chapter owes a debt to James Thier, one of the founding directors of Australian Ethical Investments, who played a key role in establishing the Climate Advocacy Fund. Any errors or omissions are of course my own.

Citation

Jacobsen, B. (2014), "Increasing the effectiveness of SRI corporate engagement on climate change through a responsive regulation framework", 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. 149-171. https://doi.org/10.1108/S2043-905920140000007006

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014 Emerald Group Publishing Limited