A central feature of the debate about “pension fund activism” and so‐called “Socially Responsible Investment” (SRI) involves the various understandings of the legal concept of “fiduciary duty” as it applies to the pension trustees charged with administering funds and setting investment policies. Traditional pension and investment industry practitioners advance the argument that the duty to administer trust property in the interest of the beneficial owners can only be respected by pursuing traditional investment policies geared to maximizing the (risk‐adjusted) rate of return. On the other hand, proponents of SRI, including some trade unionists and others advocating “labour‐friendly” investment policies, take two different tacks. One is to argue that the traditional interpretation is simply wrong, and that the “interest” and concerns of beneficial owners can extend beyond narrow financial (rate of return) outcomes. In this view, it is not the case that the duty is to “maximize” returns.
Available at: http://works.bepress.com/johanna_weststar/36/