"Socially responsible investment is a complex discipline, bringing insights that can be relevant to anyone making investment decisions in a general investment context," said the monograph's author, Julie Hudson, CFA, a managing director who heads the socially responsible investment team in equity research for UBS Investment Bank. "In short, SRI is not simply something for SRI specialists."

Hudson's monograph describes the market for socially conscious investing worldwide, explains how social investing interacts with the basic activities of financial management (the economic basis of decision making, the legal and regulatory environment, accounting and disclosure requirements, and corporate governance theories), outlines the roles of the main stakeholders, reviews disclosure and reporting issues, and concludes by discussing the ways in which social investing interacts with financial models widely used by investment professionals.

"The practice of SRI is about identifying investment opportunities that deliver the best return within any relevant constraints," writes Hudson. "The discipline of SRI has two important roles to play: (1) to recognize when it is reasonable and feasible to connect social and environmental issues to finance and (2) to recognize when they should not be so connected because market failure is highly likely to follow any such attempt."

Hudson's monograph is the latest in a series published by the Research Foundation of CFA Institute. The foundation is a not-for-profit organization established to promote the development and dissemination of relevant research for investment practitioners worldwide. 

The publication can be accessed online at www.cfapubs.org/toc/rf/2006/2006/3.

For a token to access FAJ articles and other CFA Institute publications online, please contact publicawareness@cfainstitute.org.