Research on ethical investments by Sarah Vandenbroucke
In a newly published book chapter, Transparency and information: Factors needed to promote ethical investments, ELS lab member Sarah Vandenbroucke discusses why information and transparency are needed to promote ethical investments.
The book chapter is published in Le droit international des investissements au prisme de l’éthique.
Social and Responsible Investments (SRI), also referred to as ethical or green investments, are exponentially gaining popularity globally notably due to an increased concern and awareness of corporate impact on society. Empirical and academic studies on SRI have identified factors encouraging ethical investment, such as investors’ intrinsic motivation to contribute positively to society, or long-term economic incentives. This chapter argues that information and transparency are two elements missing from the field of SRI, contributing to investors’ distrusts in sustainable investment funds. Tools such as green labels (e.g. Greenfin) have been developed to overcome the opacity of financial markets and could potentially insure SRI’s reliability. However, they remain marginal instruments seldom used, mostly due to the worrisome absence of a legal framework regulating SRI.