Universal Investors and Socially Responsible Investors: a tale of emerging affinities

摘要

This paper posits three types of investors in today's financial markets: Universal Investors, Social Investors and Rational Investors. It argues that the Universal and Social Investor are theoretically inclined to seek returns that benefit society and the environment as a whole, while the tenets of modem portfolio theory lead the Rational Investor to seek returns based primarily on market price. Because of the dominance of modern portfolio theory, the actual practices of the Universal and Social Investor reproduce those of the Rational Investor in most regards today. However, Universal and Social Investors are now pioneering at least three investment practices that promote returns to the economy and society. These are engagement with corporate management, investments that benefit underserved communities, and the setting of social and environmental standards in selecting investments. These practices differ from those of the mainstream in that they deliberately take into account more than market price in seeking returns on investments. This paper argues that measuring the value of corporations to society solely on their stock price and their ability to raise that price is not only a narrow expression of the value of corporations to society, but a potentially dangerous one. It views Universal and Social Investors as having the potential to build on and improve upon the practices of Rational Investors by developing an expanded and more complete conception of investment returns and of corporations' role in providing those returns. This paper hypothesises that universal investors and socially responsible investors - two classes of investors whose investment practices are increasingly gaining recognition around the world - share a basic affinity for the promotion of a just and sustainable society. Although the two currently differ in certain regards, together they constitute a theoretically coherent model of investment that builds and improves upon the dominant investment theory and practice of rational investors, which focus primarily on market-based returns. Part One of this paper explores the theoretical affinities between universal and socially responsible investors and highlights their points of departure from certain aspects of modern portfolio theory. Part Two examines the emerging investment practices that characterise these investors and that distinguish them from their mainstream colleagues.