ABSTRACT
In the absence of public policy and regulation, investment would be impossible. There would be no property rights to value or exchange, and no protection against market abuse. This chapter seeks to flesh out the case for institutional investor engagement in shaping pro-sustainability policy frameworks, suggesting ways in which the lessons of advocacy learned so far can be extended more broadly through the investment system. It focuses on experience in the UK, and draws on examples in other countries to compare and contrast different styles in investor engagement on public policy. A number of sustainable and socially responsible investment strategies have been developed to confront these market failures: positive and negative screening; the integration of sustainability into investment decision-making; and shareholder activism. The introduction of clear statements on policy engagement would enable investors to communicate how far they are willing to go in advocating regulatory action for sustainable development.
