UK - Standards within socially responsible investment are dropping as its market grows, a report by radical think-tank the New Economics Foundation claims.
The report 'An Ethical Door Policy' argues that without higher standards across the industry, institutional funds could be investing in companies with poor ethical and environmental standards.
The authors of the report Ed Mayo and Deborah Doane criticise SRI funds for lacking transparency when it comes to setting ethical criteria or making stock selection.
They add that SRI investment screening is over-reliant on processes such as whether a company publishes an environmental report rather than its performance.
The answer, they claim, is a certified standard of SRI, which would set minimal operating standards on stock selection, engagement and information.
Mayo said: “SRI funds should have a higher moral standard. They have to be able to differentiate themselves from the rest of the pack. This means raising, not lowering the ethical barrier.” By Paul Sanderson
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