Essec Business School

This article was originally published by The Council on Business & Society and written by CoBS Editor Muskan Chourey, from an interview with Professor Adrian Zicari. 

His research on sustainability indexes in Latin America* serves as a foundation for one of the chapters in the book titled “CSR and Sustainability Indexes: A virtuous circle”. The chapter focuses on the concept of Socially Responsible Investing, which aims to generate financial returns for investors while promoting social and environmental welfare. Professor. Zicari’s work provides valuable insight into the importance of responsible investment practices and sets the tone for the book’s exploration of sustainable finance and accounting.

Insights in sustainable investing in emerging markets

Professor Zicari’s research sheds light on the intricacies of socially responsible investing (SRI), providing readers with three critical insights.

Firstly, while the concept of SRI may seem straightforward, making sound investment decisions requires extensive and reliable information. However, obtaining such information can prove challenging, particularly in emerging markets with less developed or liquid markets. Thus, the development of sustainability indexes in such markets can play a crucial role in providing investors with access to reliable and useful information for SRI decision-making.

Secondly, sustainability indexes in emerging markets have immense potential to provide valuable information to prospective SRI investors. These indexes provide free information on a company’s sustainability practices and promote transparency, enabling investors to scrutinize and evaluate a firm’s sustainability performance. This valuable information can, in turn, help investors make informed decisions and support responsible finance and accounting practices.

Finally, the mainstreaming of SRI globally depends on the development of well-managed sustainability indexes in emerging markets. Such indexes provide a vital foundation for SRI growth and promote transparency and accountability, fostering responsible investment practices. By encouraging the development of reliable and easy-to-use sustainability indexes in emerging markets, the SRI market can continue to expand, becoming the norm rather than the exception in global investing practices.

‘Let me make a wish: that someday SRI becomes merely “investing”, without any additional adjective.’

“Even if SRI and all its technicalities may seem complicated at first glance, perhaps even intimidating to the person in the street, there are relatively simple ways to approach this issue.”, says Professor. Zicari. He added, “Sustainability indexes are not perfect, but they can be of great help for developing an SRI market in an emerging country.”

In an ideal world, Professor Zicari envisions a future where the practice of socially responsible investing (SRI) is so ingrained in our financial culture that it no longer requires any additional descriptors. In other words, he hopes that the incorporation of sustainability considerations in investment decision-making becomes the norm, rather than the exception. It’s a bold wish, but one that could lead to a more equitable and sustainable global economy.

Further reading

*Sustainability Indexes in Latin America: Can Financial Markets Push for CSR?: Concepts, Perspectives and Emerging Trends in Ibero-America  https://doi.org/10.1108/S2043-052320170000011001.