Browsing by Author "Feront, Cecile"
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- ItemThe Dynamics Influencing Progress Towards Responsible Investment: A Process Study of the Agency of the Code for Responsible Investment in South Africa (CRISA)(Stellenbosch : Stellenbosch University, 2016-03) Feront, Cecile; Schulschenk, Jess; Swilling, Mark; Stellenbosch University. Faculty of Economic and Management Sciences. School of Public Leadership.ENGLISH SUMMARY: Changes in investment strategies and capital flows are needed in order to support a transition to a sustainable economy. However, despite the rise in popularity of the concept of responsible investment, which recognises the need to take into account environmental, social and governance issues into investment decisions, the pace of change within the investment industry appears slow and disconnected from sustainability challenges. In South Africa, notwithstanding a leading voluntary and regulatory framework in line with international recommendations, progress towards responsible investment appears slow and uneven. Given the importance of time in sustainability issues, the research investigates responsible investment and the agency of supporting institutional strategies in the context of a process study. The objective of the research is to gain an understanding of the dynamics at play within the investment industry and to assess the agency of the Code for Responsible Investment in South Africa (CRISA) to promote progress towards responsible investment in South Africa. Using grounded theory methodology and drawing on the discipline of Systems Dynamics, the study develops a conceptual process framework to explore the underlying processes influencing progress towards responsible investment and evaluate the extent to which these are affected by institutional strategies. The conceptual process framework shows how responsible investment, in its current implementation, is unable to shift investment practices in time to support a sustainable economy. The dynamics of change are too slow relative to the time horizon to generate a meaningful transformation. Drawing attention to the role of learning processes and mental models, the conceptual process framework challenges the theories, assumptions and practices underlying the intentions of the investment industry and calls for new institutional strategies to encourage an ideological framework consistent with the operating principles of a sustainable economy. In light of the conceptual framework, the study evaluates the agency of the Code for Responsible Investment in South Africa (CRISA) and its supporting regulatory framework to drive transformational change within the South African investment industry. The empirical study is constructed as a multi-method research using quantitative and qualitative methods as well as expert reviews to analyse progress over three years. The findings indicate that the Code for Responsible Investment in South Africa (CRISA)’s agency to modify the investment practices of institutional investors and their service providers in South Africa is limited, slow and difficult to substantiate. While some disclosure trends appeared encouraging, these mask major issues with regards the quality, consistency, comparability and reliability of data available. Except for a few leaders, the industry is characterised by an instrumental and discretionary approach to responsible investment, which yields little effective change in terms behaviour and practices. Finally, confronting theoretical propositions with empirical findings, the research challenges the strategies used so far to promote responsible investment. The research advances that unless the regulatory environment offers conceptual clarity and takes a firm and consistent stance in support of the sustainability imperative, the Code for Responsible Investment in South Africa (CRISA)’s agency within the dynamics of change in South Africa is likely to remain limited, inconsistent and temporarily disconnected from the problems it tries to address.