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Title:SRI: mission impossible?
Date of publishing:July 22, 2013
Also available in the following languages:Dutch, French

SRI: mission impossible?
July 22, 2013

On July 2, 2013 appeared in the British newspaper The Guardian an article by a former employee of Forum ETHIBEL Frederic Ghys and Louvain School of Management pupil Hanna Hinkkanen. In a brief but powerful opinion piece the authors explain the importance and stakes of socially responsible investing (SRI), the complex responsibility of both banks and consumers in the spread of SRI and the need for deepening and widening the current range of socially responsible and ethical financial products.

Through mystery shopping, Hinkkanen discovered that financial advisers are not sufficiently aware of the SRI offer of their own bank and that there exists an endemic lack of enthusiasm to promote SRI products to the consumer. The stereotypes around SRI prove stubbornly present in the heads of banks and in the worst cases, the consumer is (often consciously) incorrectly informed about the (positive) impact and the financial return of SRI.

Banks like to defend themselves arguing that consumers are not or only lukewarm interested in sustainable and socially responsible investing. However, this finding is largely the result of a self-fulfilling prophecy that is maintained by the banking sector: by openly discouraging consumers to choose for SRI one stifles any possibility of growth in this market segment. The authors however find that if a consumer is well informed about SRI, he or she will in most cases prefer a sustainable investment over a classic investment.

Ghys and Hinkkanen conclude that sustainability criteria such as environmental and social considerations are increasingly embedded in the financial sector, but that there is still much work to be done in terms of providing information to consumers, training of financial advisors, active promotion of SRI and integration of SRI in the wider strategy of the banks.

Read the full article here.