Socially Responsible Investment (SRI) as Emergent Risk Prevention and Means to Imbue Trust in the Post 2008/09 World Financial Crisis Economy

Abstract

Globalization and socio-economic changes heralded attention to Financial Social Responsibility. Ever since socio-economic crises have steered social conscientiousness; yet in the aftermath of the 2008/09 World Financial downturn, the interest in understanding social responsibility in the interplay of financial markets and the real economy has reached unprecedented momentum. Financial Social Responsibility bridges the finance world and society through Socially Responsible Investing (SRI), in which securities are foremost selected for social, environmental, ethical and institutional aspects. Financial investment calculus is aligned with ethical, moral and social causes through socially responsible screenings, shareholder advocacy, community investing, and social venture capital. SRI perpetuated in the eye of the 2008/09 World Financial Crisis, given the world-wide attention to social conscientiousness and regulatory financial market reforms. Innovatively scrutinizing financial social responsibility as an en vogue topic of interest helps portraying SRI as a panacea to avoid emergent risks – risks that emerge in complex interactive systems by collective outcomes of individual decision making fallibility over time. When people decide, limitations in their capacity to foresee long-term impacts and the collective outcomes of their choices can contribute to institutional downfalls. Emergent risks can have crucial impacts in the finance domain as the 2008/09 World Financial Crisis outlined. Future research may capture SRI as a real-world relevant means to averting emergent risks within a globalized economy. A nested approach featuring qualitative and quantitative global measurements should aim at gaining information about the interaction of financial markets with the real-world economy. A qualitative analysis of Financial Social Responsibility could retrieve SRI as a means to lower emergent risks within institutionalized market systems in order to avert future economic failures. Capturing stakeholder-specific financial social responsibility practices aims at determining SRI success factors. Mapping globalization market tools and financial market databases could concurrently depict qualitative and quantitative SRI changes in the aftermath of the 2008/09 World Financial Crisis in order to delineate the potential of SRI to avert emergent risks in the aftermath of the 2008/09 financial market downturn. Depicting SRI during this unprecedented time of economic change and regulatory reform holds invaluable historic opportunities to outline a crisis’ potential to ingrain social responsibility and bestow market actors with trust in the global market economy. At the same time, spearheading financial social conscientiousness will aid a successful SRI implementation to avert future economic market downfalls and bestow market actors with trust in the global economy following the greater goal of economic market stability and a sustainable global economy.