The legitimacy of ESG standards as an analytical framework for responsible investment

Cadman, Tim (2011) The legitimacy of ESG standards as an analytical framework for responsible investment. In: Responsible investing in times of turmoil. Issues in Business Ethics (31). Springer, Dordrecht, Germany, pp. 35-53. ISBN 978-90-481-9318-9


This chapter argues that environmental-social governance (ESG), of which responsible investment (RI) is now a leading example, is built around models of social-political interaction in which participation and deliberation are key structural and procedural components. This approach provides a more holistically legitimate basis to corporate governance, rather than current models of corporate social responsibility, which focus on one or two attributes (such as accountability or transparency). In the conception offered here, a broad range of institutional arrangements are linked to the structures and processes of 'good' governance. Using a hierarchical framework of principles, criteria and indicators, which places these arrangements in a coherent framework for assessment, it is then possible to evaluate institutional quality. This approach is contrasted with the current, more restricted set of criteria used at present. The chapter concludes with some observations on the legitimacy of contemporary RI, and calls for universal standards to ensure consistency of governance across the sector, thus avoiding future crises of confidence analogous to the GFC.

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Item Type: Book Chapter (Commonwealth Reporting Category B)
Refereed: Yes
Item Status: Live Archive
Additional Information: Published version deposited with blanket permission of publisher.
Faculty / Department / School: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Date Deposited: 08 Apr 2011 01:41
Last Modified: 12 Apr 2017 01:40
Uncontrolled Keywords: governance; responsible investment; standards; legitimacy
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement
15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150106 Sustainability Accounting and Reporting
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970114 Expanding Knowledge in Economics
Identification Number or DOI: 10.1007/978-90-481-9319-6_3

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