Introduction

Daniel Beunza

I personally think of this issue as a newsletter’s version of the self-portrait. Just as the best painters sometimes represent themselves on a canvas, here at the RI Quarterly we are devoting our pages to discuss the PRI. Wit, humbleness, and a good deal of self-reflection tend to define my favourite self-portraits. Like those, the articles we bring together offer a valuable analysis on where the PRI is at the moment, as well as its past and its future prospects.

The issue leads with an article by James Gifford, founder and Executive Director of the PRI until 2013. I’ve known James for the past five years, and whenever I heard him present – whether in front of my classroom at the London School of Economics, or elsewhere – he never failed to make an original and important point. His article does not disappoint. In it, James reflects upon the biggest change we have seen in the field of responsible investment during the past ten years: the shift from ethically-oriented SRI investment to a more investor-friendly ESG approach. This is an important milestone, but as James reminds us, the task is not finished. Asset owners need to push asset managers to deepen their responsibilities as investors. Externalities need to be addressed. Time horizons need to be aligned. Investment managers must be trained in ESG. The investment consultants need to understand ESG as well. There is, in short, a lot of work that lies ahead.

Steve Lydenberg of Domini Social Investments, follows with a perceptive analysis of responsible investors. If anyone is qualified to discuss this topic, that person is Steve. I first interviewed Steve back in 2009 in the very inspiring Soho offices of Domini, and it soon became clear to me that he is one of the great pioneers in the use of mainstream tools and strategies in responsible investment. In his article, Steve introduces a novel and important idea: that there are four distinct approaches to responsible investment. For instance, one stresses norms and standards, another one emphasises ratings and research, and so forth. This is relevant to corporate managers, as it is not the same to fit with existing norms of best practice than to score highly on a rating.

The article by Jean Pascal Gond and Valeria Piani deals with a classic topic of the social sciences: collaboration. Jean Pascal, who is a good London neighbour of mine at the Cass Business School and rising star in the study of responsible investment, teamed up very effectively with the practical expertise of Valeria Piani of the PRI. The result is a cogent analysis of the challenges of collaborative engagement: the authors remind us that collaboration can be a source of strength when it comes to engaging corporations, and reflect on the ways in which the PRI has helped overcome barriers to collective action.

The article by Arleta Majoch, Tessa Hebb and Andreas Hoepner is remarkable for employing the tools and theories of academia to discuss the PRI itself. The authors, impressed me with the rigour of their research in this past September’s Academic Network conference in Montreal, so it is only right for us to convey their message in this issue. They ask a simple question: why do companies sign up to the PRI? The provocative answer they provide is that commitment to responsible investment is only one of the reasons. Many others do so for what sociologists like myself would call “symbolic reasons,” that is, to improve their image in front of clients.

All in all, the four articles on this issue of the RI Quarterly give a sense of the PRI and responsible investment at large. As with all self-portraits, some features come out looking better than others. It is my hope that this issue will also provoke useful reflection and prompt progress in the advancement of responsible investment.