The concept of Responsible Investment revolves around investment that overtly incorporates environmental, social and governance factors to deliver competitive financial returns and ensure positive impact on society and environment.
According to US Sustainable Investment Forum, responsible investment has seen significant growth in recent years and constitutes $6.57 trillion of assets, i.e. “more than one out of every six dollars under professional management in the United States” (US SIF, 2014). Responsible investment is increasingly considered by mainstream investors and financial institutions and applies across different asset classes.
Responsible investment, also related to impact investing and sustainable finance, among other terms, can take different forms. These include incorporation of ESG factors into portfolio selection, investment in specific programmes and engagement with the corporations worldwide via dialogue or shareholder resolutions to encourage companies to adopt sustainable strategies. Responsible investment can be carried out both individually and via specific financial market instruments such as responsible investment indices.
Responsible investment has shown to make substantial impact on the companies and the markets. This is why understanding its strategies and their efficiency in different contexts is crucial.
SBI works towards helping Scottish business understand, manage and implement responsible investing to ensure robust performance and positive societal outcomes.
SBI’s Tatiana Rodionova leads research in this field.