Sarah McGill - Canadian Business Ethics Research Network

Sarah McGill

PhD Candidate, School of Geography and the Environment, University of Oxford

sarah.mcgill@ouce.ox.ac.uk

Research Area:
Governance, sustainable investment

Sarah McGill is a DPhil candidate at the University of Oxford, School of Geography and the Environment. She holds an MPhil (with Distinction), also from Oxford, and a BA in East Asian Languages and Cultures (summa cum laude) from Columbia University, New York.

Reframing the governance challenge for sustainable investing

Abstract
In an era of borderless financial markets, the financial sector can serve as an important mechanism for addressing long-term environmental, economic and social degradation. In particular, institutional investors tasked with long-term asset-liability management are integrating environmental, social and governance (ESG) considerations into their decision-making and ownership practices to navigate future investment opportunities and threats. Despite the increase in sustainable investment initiatives, the transformation to a more sustainable economy remains unrealized. We argue this is because sustainable investment has been conceived and executed largely via existing governance frameworks, which are incongruent with the 'sustainable' problems facing institutional investors. To illustrate this point, we draw a distinction between traditional and sustainable problems, arguing that the latter are characterized by residuals (as opposed to externalities), such as conflict and behavioural biases and that these residuals are irreducible. This distinction provides critical insight into why institutional investors must invest in their own governance to meet the challenges and opportunities that sustainability problems raise. While far from a comprehensive research agenda, the paper draws on shared insights from the graduate student papers in this special issue as they grapple with questions of innovation in governance required to confront sustainability issues. We conclude with suggestions for future research.

Download the Paper (PDF)

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