CEVI-WP 09-04

Fostering Progress by Tearing Down and Building Information Asymmetries in SRI-Projects
Jos Leys & Wim Vandekerckhove


The purpose of this paper is to tackle two problems related to so called “socially responsible investment” by financial intermediaries such as pension funds or insurance companies. Both problems concern information asymmetries at the ends of the value chain of the investment process. Our analysis is structured as a business case for private pension funds and insurance companies because their decision whether and how to adopt SRI-policy is or should be based on the scrutinising of financial and reputation opportunities and risks of the particular project at hand. Our material focus is on an actual SRI-project, viz. Portfolio21, but insights and conclusions can easily be exported.

We argue that the management of information asymmetries is pivotal in making progress on all fronts; at some points in the value chain information asymmetries hamper and at other points they foster progress. It is by carefully analysing them and consequently taking adequate management decisions that sustained and sustainable progress may be assured.

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