Introduction

The catchphrase for investments that both safeguard the financial assets of the funds under management and show proper concern for the communities and the environment affected by those investments is ‘responsible investing’ (RI) or ‘socially responsible investing’ (SRI). While such phrases until recently were reserved for funds that have a strict screening policy, they are increasingly becoming part of the self-understanding of large, broadly invested, mainstream funds.

When we use such phrases, however, we should also be careful to clarify their meaning, in this case not least the meaning of responsibility. What is implied by the claim that someone is responsible? What kinds of responsibility are there? And which of these are relevant to a modern institutional investor?

A very basic way to explain what responsibility is focuses on the ability to give a response: If someone were to complain about the conference venue where this paper was first presented, and they came with their complaint to us, there is no reasonable way in which we, as authors or presenters, could be expected to respond to the complaint. We are in no position to respond, in terms of our competence, our knowledge, or our position. If they, on the other hand, lodged a complaint about the quality of the lectures at the conference, we might well be expected to give a response. And if the complaint especially surrounded the last lecture before lunch (ours!), then we would indeed be the ones from whom to expect a justifying or excusing response.