Socially Responsible Investment as a Process for Assessing CSR Strategies: Theoretical Implications for CSR

Abstract

Purpose

This chapter furnishes empirical evidence on CSR rating used by socially responsible investment (SRI). It analyzes data provided by CSR rating agencies as well as raw data, raw information disclosed. It thus suggests a new definition of CSR, based on the CSR measurement attempts and pitfalls generated for and by socially responsible investors.

Methodology/approach

This chapter presents two sets of empirical data analysis. The first set of data is drawn from the WBCSD best case studies from 1992 to 2005 and focuses on the good practices of companies. The aim is to analyze the motivations of companies and their set of stakeholders. The second data set is drawn from the Sustainalytics controversy database and focuses on the bad practices of companies. The aim is to analyze the set of stakeholders of companies.

Research findings

The first empirical research clearly shows that the main strategic target is license to operate, including compliance. The second empirical research shows that the main stakeholder is the government. These empirical works confirm the many examples provided and the philosophical backgrounds reminded in the chapter.

Research implications

This chapter also draws some conclusions on corporate social responsibility and suggest a reframing of the concept on a set of two agency relationships: shareholder–manager (for private goods) government–manager (for public goods). This enables to define the way to optimize the agency relationship according to the different conditions of information and technology, as described in the case of environmental regulation and corporate strategies (Schneider-Maunoury, 1999).

Practically this chapter incites stakeholders to focus CSR issues on public policy definition (goal setting and implementation) in order to define corporate targets to achieve. Socially responsible investors could therefore define the impact they want to finance (as it already happens for green or “social business” funds).

Practical/social implications

This scheme enables a better understanding of CSR related issues by focusing on the main players. Other stakeholders, such as NGOs and employees are considered as elements of a political process with government. This scheme identifies more clearly the pitfalls of environmental and social policies.

Originality/value

This chapter is a unique attempt to go beyond usual criticisms of CSR ratings and other socially responsible investment methods. Drawing the consequences of these problematic measurements of CSR enables to reframe and redefine CSR, by identifying the key players and a theoretical framework to analyze their relationships.

Citation

Schneider-Maunoury, G. and Gouin, A. (2016), "Socially Responsible Investment as a Process for Assessing CSR Strategies: Theoretical Implications for CSR", Finance and Economy for Society: Integrating Sustainability (Critical Studies on Corporate Responsibility, Governance and Sustainability, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 139-160. https://doi.org/10.1108/S2043-905920160000011007