Is Socially Responsible Investment Possible in Latin America?

An article of mine with this title is included in a special issue, Number 48, of the Journal of Corporate Citizenship published in early July 2013: Responsible Investment in Emerging Markets.  In this website you can see the detailed contents, download the free introduction and buy individual articles (pdf files) or the whole issue.

The issue includes a series of major articles that analyze the implications – for investors and for society – of investors seeking to take a more responsible approach to their investments. The contributors offer practical suggestions on the role that investors can play. They also caution that investors are only one of many important actors and that the debate around the contribution that responsible investment can make should not undermine the critical role of national, regional and local governments in creating the conditions for foreign investment to make a real contribution to improving the lives of the citizens of these countries.  

Is Socially Responsible Investment Possible in Latin America?

ABSTRACT

Socially responsible investment offers the potential to contribute to improved corporate practices through the incentive of enabling more responsible companies to access financial resources under better terms. Improved corporate practices are important because of the potential contribution these practices could make to economic development, to the development of financial markets and to the quality of individuals’ lives in general. Incentivising these practices through the capital markets requires that there are investors capable of and willing to invest in more responsible companies (i.e. that there is demand for responsibility) and that there are responsible companies for them to invest in (i.e. that there is a supply of responsible companies). This paper analyses the demand and the supply sides of this equation in the major Latin American markets, with a particular focus on Brazil. It concludes that, while both supply and demand are limited at present, there is considerable potential to strengthen both, although this requires policy-makers and investors to play an active role in the creation of the right conditions for responsible investment to flourish and grow.