Who Dares to Care? (In the World of Finance)

ABSTRACT

This study argues that gendered barriers to care are limiting the progress of socially responsible investment (SRI). Anchored within the world of finance – an industry predicated on mathematical theorizing, neoclassical economic thought, and omission of relational values – the inclusion of environmental, social, and governance (ESG) reporting, a commonly used term for nonfinancial information in SRI, in investment decision making confronts several barriers. One such barrier concerns care: who cares for what, and where. In an environment where an atomistic-individualistic ontology dominates, and a relational-values ontology is omitted, the study investigates the possibilities for ESG to have a wider uptake. It considers the changes required to align the inherently relational aspect of care within a culture of economic reasoning reliant on the exclusion of care. It concludes with suggestions for how a relational caring perspective can be incorporated to accommodate and encourage SRI in the world of financial management.

KEYWORDS:

• Socially responsible investment (SRI)
• finance
• social ontology
• care
• modern portfolio theory (MPT)
• fiduciary
• environmental
• social
• and governance (ESG)

JEL Codes:

• P34
• B54
• E22

ACKNOWLEDGMENTS

Acknowledgments are due to both the Cambridge Political Economy Society Trust, for their generous and ongoing support, and to the Cambridge Social Ontology Group, for providing an all-important forum for regular discussion on ontological matters.

Notes

1 For legal interpretations of fiduciary, see the UNEP Finance Initiative Report (Freshfields Bruckhaus Deringer 2005) and its update “Fiduciary Duty in the 21st Century” (Sullivan et al. 2015). While the findings of the first were held to be positive by proponents of SRI, who claimed its findings indicated that under some conditions trustees were actually obliged to consider ESG as part of their investment risk assessment, the actual conditions under which SRI can be pursued have been shown by others to be limited under current legal requirements (Sandberg 2011).

2 ESG first made an appearance in 1997 in John Elkington’s (1997) book, which is widely seen as marking the advent of “sustainable business” or “corporate sustainability.” The triple bottom line was used to drive home Elkington's point that businesses need to take nonfinancial considerations into account on their balance sheets.

3 Readers may also wish to refer to theoretical developments taking place under the umbrella term of “new materialism,” a philosophy of science advocating for a “material turn,” and looking to address the loss of “the real” – the result of the social constructivist rejection of positivist materialism. For critiques of this newly developed relational ontology, and comparisons with others, see Lena Gunnarsson (2013) and Mussell (2016).

4 For a range of developments in care ethics, including application into political science, see Daniel Engster (2009, 2015), Gilligan (1982, 2003, 2014), Virginia Held (1993, 2006, 2014), and Joan Tronto (1993, 2013).

Additional information

Notes on contributors

Helen Mussell

Helen Mussell earned her PhD in Gender Studies at the University of Cambridge, where she was Cambridge Political Economy Society Trust Scholar. Her research draws from feminist economics, care ethics, and wider feminist philosophy, including epistemology and history of thought. An ontological orientation plays a central role in her work. She is currently undertaking a critique of business ethics using a feminist theoretical framework, with a future foray planned in feminist jurisprudence.