Elevating the Role of Divestment in Socially Responsible Investing |
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Authors: | Cedric E. Dawkins |
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Affiliation: | 1.Rowe School of Business,Dalhousie University,Halifax,Canada |
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Abstract: | The divest movement has focused attention on strategic and ethical differences in the practice of socially responsible investing (SRI) and highlighted an unnecessary bifurcation of best-of-class engagement and divestment. Although best-of-class engagement is favored as a contemporary and pragmatic approach, this paper calls for a more pronounced recognition of absolute dealbreakers and divestment as an underpinning for best-of-class engagement. After linking divestment and best-of-class engagement to their foundations of absolutism and relativism, respectively, I critique best-of-class engagement and argue that without a distinct and explicit role for divestment, best-of-class strategies are ethically and strategically fraught. Following a discussion of which types of issues suggest divestment or best-of-class engagement, I identify the Norway Government Pension Fund as a noteworthy example, and posit that divestment and engagement are best presented and employed in tandem, particularly for issues that have yet to be addressed by law and convention. |
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