Corporate social responsibility (CSR) was shown in class to be a burgeoning field of ethics for MNCs to adapt to with varying effects. However, I want to highlight a new field of CSR concerning financial MNCs that have begun to transition them into a new era of responsibility.

Socially responsible investing (SRI)  is a result of financial firms choosing new approaches to how portfolios manage portfolios. They encourage strong practices that promote things like environmental sustainability, diversity and inclusion, and human rights. Traditionally, these exclude social “bads” such as firearm companies, tobacco companies, and fast food manufacturers to choose other stocks and bonds that have a gentler impact socially. This can be viewed as a new form of how corporations are looking to take responsibility for their firms investment procedures, as they understand their role in promoting problematic, or unsustainable business practices.

For such wealth management firms such as Wealthsimple,  they prominently use SRI in order to advertise their firm as different from others. They highlight the differences in a typical portfolio compared to their SRI portfolio, even stating that over a quarter of Wealthsimple clients have chosen an SRI portfolio. They tout the sheer number of funds invested in SRI around the world, which they label at $22 trillion but the number could be quite higher (Wealthsimple, 2019). For new investment firms, SRI is seen as a new way forward, breaking apart from the mould of older investment firms that both evasive in their ability to accept responsibility in the past.

While some see SRI as a new means for the firm to exercise responsibility, they really represent the individualization of investing but in a new way. Firms in the past through devolution and deregulation were able to move risk toward the individual as the hollowing out of the state occurred, removing responsibility from the state. The rise of SRI instead can be seen as the devolution of responsibility from the firm to the consumer, where it’s the consumer’s choice to make socially inclusive decisions (O’Rand and Shuey, 2007). For that reason, the actions of firms to offer SRI is a good step toward responsibility for their investment practices, but it shouldn’t be on the consumer to make those decisions; firms are still dodging the bullet.

While CSR is a new arena for the corporation, true responsibility will occur when the firm, not the consumer, takes the agency to move toward more sustainable business practices.

References

O’Rand, A. M., & Shuey, K. M. (2007). Gender and the devolution of pension risks in the US.Current Sociology, 55(2), 287-304. doi:10.1177/0011392107073315

Wealthsimple: Socially Responsible Investing. (n.d.). Retrieved from https://www.wealthsimple.com/en-ca/feature/socially-responsible-investing/