Thursday, April 24, 2008

What's in a name?

As mentioned in an earlier post, the term "socially responsible investing" has become standard in industry and culture, for better or worse. There are, however, those who either continue to hold to other language or push for something else altogether.

Personally, I find the SRI label both too specific and too vague. It is too specific in that it has come to mean certain things to certain people, creating a presupposition regarding what SRI means that may or may not mean what we as individuals or institutions take it to mean. On the other hand, it is too vague in that there can be a multiplicity of such interpretations. SRI begs the questions of what it means to be socially responsible and how it is that an individual or institution is so through its investments. The label carries no distinctive meaning, which is perhaps both its strength as well as its pitfall. A similar critique could be applied to The Christian Science Monitor's insistence on the label "Ethical Investing."

A more forceful claim is that of those who argue for Best Practice Environmental Social and Governance Reporting (ESG). This seems to be part of a trend to differentiate "objective" measures from the "values-based" analysis of SRI. While the development does appear to address the increasing diversity of interpretations regarding what social responsibility means, it could indicate a willingness to jettison the term along with any discussion of values and ethics in an effort to gain legitimacy and secure the scientific high ground. All three, though, involve value judgments and assume a moral high ground that declares other investments "socially irresponsible," "unethical," or "unsustainable."

My preference for the goals I am trying to outline might be something along the lines of "Investment Conforming to Quaker Principles." This narrows the task to that of addressing the goal of seeking financial stability through the unique religious and historical character of a particular faith tradition and secures an understanding rooted in this tradition rather than in potentially fleeting investment practices and phraseology.

Whether or not we use such a label, though, holding on to such a view may help us avoid buying too readily into certain investments or ideas simply because they label themselves as ethical, responsible, or sustainable.


Ron Robins said...

Good post. Good discussion on the term, socially responsible investing (SRI)! I'm glad to have come-across your blog.

I've been following SRI for around forty years and have a site that you and other readers might like to look at. It covers the latest global news and research related to SRI. It's at

Good luck and best wishes, Ron Robins

Matthew Hisrich said...

Excellent, thanks for stopping by! I have added your site to the links on this page. I'm sure there will be interest in exploring your work.

Ron Robins said...

Thanks for posting my site and for your kind words.

Again, best wishes, Ron