Pub Date : 2007-01-02DOI: 10.21825/philosophica.82176
Kristian Alm
In this article I will describe the main elements of the Norwegian press’s moral confrontation with the Government Pension Fund’s ethical investment management when it was in an introductory phase in early 2005, with special emphasis on one newspaper, Stavanger Aftenblad. The press criticized the fund’s fresh investment profile and intended exclusionary practice before it had really st arted in earnest. Then I will focus on how the press’s unilateral criticism of the fund’s investment practice at the ti me ove rshadowed a discussion of any defects i n the ethical pri nciples f or in vestment. And I will focus on the press’s lack of distinguishing between information and sensation. In conclusion I point out that in 2006 the press has abandoned its critical stance from 2005 and has now a tendency to idealize the fund’s exclusionary practice and the underlying principles.
{"title":"Challenges to Investment Ethics in the Norwegian Petroleum Fund: a Newspaper Debate","authors":"Kristian Alm","doi":"10.21825/philosophica.82176","DOIUrl":"https://doi.org/10.21825/philosophica.82176","url":null,"abstract":"In this article I will describe the main elements of the Norwegian press’s moral confrontation with the Government Pension Fund’s ethical investment management when it was in an introductory phase in early 2005, with special emphasis on one newspaper, Stavanger Aftenblad. The press criticized the fund’s fresh investment profile and intended exclusionary practice before it had really st arted in earnest. Then I will focus on how the press’s unilateral criticism of the fund’s investment practice at the ti me ove rshadowed a discussion of any defects i n the ethical pri nciples f or in vestment. And I will focus on the press’s lack of distinguishing between information and sensation. In conclusion I point out that in 2006 the press has abandoned its critical stance from 2005 and has now a tendency to idealize the fund’s exclusionary practice and the underlying principles.","PeriodicalId":322225,"journal":{"name":"Information asymmetries in socially responsible investment","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125146045","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-01-02DOI: 10.21825/philosophica.82178
Karl W. Einolf
This paper uses two techniques to build a socially responsible portfolio of U.S. equities and examines prospective perf ormance us ing publicly avai lable data. The first technique eliminates stocks from considerat ion using categorical exclusions with a restrictive Environment, Social and Governance (ESG) screen. The paper shows that stocks surviving the screen have a significantly higher average projected Value Line alpha and are more likely to have a Morningstar 5-star rating. Using cate gorical exclusions, however, introduces a sector bias in that the ESG screen is more likely to restrict stocks from the manufacturing sector than the service sector. The second technique does not introdu ce a sector bias because it uses a best-in-class optimization approach in place of screening. The paper introduces a linear programming model called Data Envelopment Analysis (DEA) to the application of SRI portfolio development to find the best financially and socially performing companies within each industry sector. When compared to a categorical exclusions portfolio, a DEA portfolio is rated significantly higher by Morningstar and Value Line. Depending on the specific needs of a socially responsible in vestor, t he DEA technique could be a better tool in developing a financially and socially balanced equity portfolio.
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Pub Date : 2007-01-02DOI: 10.21825/philosophica.82180
Jos Leys
This paper, an epi logue to the special issue on sociall y responsi ble investment (SRI), is a first attempt to philosophically tackle information asymmetries that pertain to the consequences or the effectiveness of SRI-policies. The paper discerns four types or techniques of SRI: 1) shareholder engagement; 2) the selection of best-in-class entities; 3) the maintenance of cat egorical exclusions; 4 ) the financing of alternative economies. For each technique, the paper first briefly sketches the mechani sm that is put to work by the SRI-investor. Then, I try to assess whether the investor is able to know whether or not his SRI-effort is being or has been effective in the real world.
{"title":"Having a Look at the Effectiveness of SRI-endeavours","authors":"Jos Leys","doi":"10.21825/philosophica.82180","DOIUrl":"https://doi.org/10.21825/philosophica.82180","url":null,"abstract":"This paper, an epi logue to the special issue on sociall y responsi ble investment (SRI), is a first attempt to philosophically tackle information asymmetries that pertain to the consequences or the effectiveness of SRI-policies. The paper discerns four types or techniques of SRI: 1) shareholder engagement; 2) the selection of best-in-class entities; 3) the maintenance of cat egorical exclusions; 4 ) the financing of alternative economies. For each technique, the paper first briefly sketches the mechani sm that is put to work by the SRI-investor. Then, I try to assess whether the investor is able to know whether or not his SRI-effort is being or has been effective in the real world.","PeriodicalId":322225,"journal":{"name":"Information asymmetries in socially responsible investment","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123704977","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-01-02DOI: 10.21825/philosophica.82177
Etienne Coerwinkel
NGOs have taken a dom inant position in setting the agendas of Corporate Responsibility and Socially Responsible Investment matters, thereby skewing the efforts of corporates to limit negative externalities towards their own agendas. As the latter remain to a certain extent unpredictable, corporates must deal with an informati on asymmetry. This situation can be explained by the historically defensive nature of Corp orate Responsibility codes established by companies under pressure of the NGOs. In this paper, I contend that only a new approach to Corporate Responsibility co uld reverse this asymmetry: one where the social responsibility matters are articulated in a political debate between all stakeholders of a company and wh ere conflicting interests are addressed in a deliberative process. To this end, the corporate world and the NGOs need to understand the need for a larger debate that includes all relevant stakeholders defined as the Public in the sense of Dewey. Latour and the Actor-Network theory provide us with a workable fr amework to structure such a dialogue, where participants have the authority and legitimacy to speak for the Public.
{"title":"Asymmetries in the Social Responsible Investment Agendas: From an NGO Driven World to a Stakeholders Dialogue.","authors":"Etienne Coerwinkel","doi":"10.21825/philosophica.82177","DOIUrl":"https://doi.org/10.21825/philosophica.82177","url":null,"abstract":"NGOs have taken a dom inant position in setting the agendas of Corporate Responsibility and Socially Responsible Investment matters, thereby skewing the efforts of corporates to limit negative externalities towards their own agendas. As the latter remain to a certain extent unpredictable, corporates must deal with an informati on asymmetry. This situation can be explained by the historically defensive nature of Corp orate Responsibility codes established by companies under pressure of the NGOs. In this paper, I contend that only a new approach to Corporate Responsibility co uld reverse this asymmetry: one where the social responsibility matters are articulated in a political debate between all stakeholders of a company and wh ere conflicting interests are addressed in a deliberative process. To this end, the corporate world and the NGOs need to understand the need for a larger debate that includes all relevant stakeholders defined as the Public in the sense of Dewey. Latour and the Actor-Network theory provide us with a workable fr amework to structure such a dialogue, where participants have the authority and legitimacy to speak for the Public.","PeriodicalId":322225,"journal":{"name":"Information asymmetries in socially responsible investment","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131634850","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-01-02DOI: 10.21825/philosophica.82179
Bert Scholtens, L. Spierdijk
In this paper, we analyze the behavior of Dutch tropical timber investment funds in relation to financial regulation. These funds are a niche market within the market for socially responsible investments. Duri ng the past few year s, se veral Dutch timber funds went bankrupt, whereas others were surrounded by scandals. Partly as a reaction to this, tighter regulation was developed and implemented. In resp onse to the regulatory changes timber funds adjusted their operations and bus iness strategy. The lack of supervision of tim ber funds, the subsequent tightening of the regulation and the strategic responses of the timber funds fits into the ‘regulatory dialectic’ as de scribed by Edward Kane. Moreover, we can use Akerlof’s concept of informational asymmetries to explain the underlying cause of the regulatory dialectic. The key problem with the Dutch timber funds is that there is no financial supervision with respect to the liquidity and the solvency of the timber funds. Consequently, investors are unable to verify the claims made by t he timber funds, which causes major information asymmetries between the two parties. Our case study demonstrates how a lack of regulation can spoil a market that in itself has the potential to offer something useful to society.
{"title":"Lemons and Timber. The Case of Tropical Timber Investment Funds in the Netherlands","authors":"Bert Scholtens, L. Spierdijk","doi":"10.21825/philosophica.82179","DOIUrl":"https://doi.org/10.21825/philosophica.82179","url":null,"abstract":"In this paper, we analyze the behavior of Dutch tropical timber investment funds in relation to financial regulation. These funds are a niche market within the market for socially responsible investments. Duri ng the past few year s, se veral Dutch timber funds went bankrupt, whereas others were surrounded by scandals. Partly as a reaction to this, tighter regulation was developed and implemented. In resp onse to the regulatory changes timber funds adjusted their operations and bus iness strategy. The lack of supervision of tim ber funds, the subsequent tightening of the regulation and the strategic responses of the timber funds fits into the ‘regulatory dialectic’ as de scribed by Edward Kane. Moreover, we can use Akerlof’s concept of informational asymmetries to explain the underlying cause of the regulatory dialectic. The key problem with the Dutch timber funds is that there is no financial supervision with respect to the liquidity and the solvency of the timber funds. Consequently, investors are unable to verify the claims made by t he timber funds, which causes major information asymmetries between the two parties. Our case study demonstrates how a lack of regulation can spoil a market that in itself has the potential to offer something useful to society.","PeriodicalId":322225,"journal":{"name":"Information asymmetries in socially responsible investment","volume":"11 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114340901","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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