Transforming Socially Responsible Investment: Lessons from Environmental Justice

There is limited evidence that socially responsible investment (SRI) strategies can resolve persistent concerns brought up in scholarship on the industry, particularly as it relates to considerations of justice. It is critical that SRI initiatives be interrogated about their broader impacts on environmental inequality and justice in the context of global power relations. Drawing upon environmental justice (EJ) theory, we propose a framework for transformative investment to halt the exploitation of humans and environment in pursuit of profit. We posit that transformative investment initiatives, including those related to strategies of screening and shareholder resolutions, would reflect three general conditions of environmental justice. They would require (1) cumulative responsibility that focuses on holistic gains so that investment initiatives do not replace one harm with another; (2) embedded accountability that is rooted in the decision-making and concerns of directly impacted communities; and (3) counter-hegemonic practices that are integrated with broader strategies and movements that challenge structures of oppression and exploitation. Through these principles, we address problems with SRI that have already been identified in scholarship on the subject. Moreover, we draw upon Antonio Gramsci's concept of 'strategic power' to conceptualize the conditions and actions necessary for transformative investment to take root.