Celebrating 75 Years of the Financial Analysts Journal

CFA Institute, the global association of investment professionals, is celebrating 75 years of the Financial Analysts Journal, the leading practitioner journal in the investment management community. The celebration entails a series of Anniversary Perspectives that analyze the publication’s archives to reflect on the continued relevance of debates presented through seven decades of rigorous and peer-reviewed research.

Beginning August 19, readers of the Financial Analysts Journal worldwide can freely access the complete five-part series, which includes the newly published article Environment, Social, and Governance Issues and the Financial Analysts Journal(Starks, 2021), a timely review of journal papers focused on ESG issues. The review discusses how this collective body of work offers an important reference point for today’s ESG landscape.

Heidi Raubenheimer, PhD, CFA, Managing Editor for the Financial Analysts Journal, comments:

“The Financial Analysts Journal was one of the first financial journals to publish on the social responsibility of organizations. Its archives reveal a remarkable collection that begins in 1945, a time that demanded great creativity and purpose, and where issues that we think of in ESG terms today were being worked through in the pages of the journal. These contributions from leading investors and academics over many decades show parallels for today’s investors with regard to such issues as divestment and social responsibility, which can be seen in the light of current fossil-fuel divestment and corporate and market boycotts. They also challenge us to consider how we navigate competing views, and why and when step changes occur.”

A selection of key discussion points from the ESG issues review include:

• Some 60 years ago, articles discussing the social responsibility of business began with The New Capitalism (Joseph, 1955) and included World Food Needs (Freeman, 1967) on the assisting role of the private sector and Capitalism and Financial Innovation (Shiller, 2013) on B Corps, crowdfunding and social impact bonds to address societal goals.
• In 1971, the Financial Analysts Journal had its first publication related to diversity in organizations in Bradshaw’s The Corporation Executive’s View of Social Responsibility, which shared his views on management actions to address racial and gender diversity.
• Early shareholder activism emerges in The Gilbert Brothers-Gadflys or Eagles? (Kahn, 1971): Lewis D. and John J. Gilbert’s calls for more information in annual reports, director ownership in stock, and responsible watch over executive salaries, options and pensions, would resonate with shareholder activists today.
• In a first for a finance journal, Doing Well While Doing Good? (Hamilton, Jo, Statman, 1993), provided early comment on ESG performance through an analysis focused on the performance of socially responsible funds; and in one of the most highly cited articles in the review, The Eco-Efficiency Premium Puzzle (Derwall, Guenster, Bauer, Koedijk, 2005), focused on environmental performance through a concept the authors called “eco-efficiency,” an idea that can be seen alongside today’s concept of the circular economy.
• In the 1980s, pressures on investors to divest from companies doing business in South Africa increased and received significant coverage, including through analysis for asset owners in South African Divestment: Social Responsibility or Fiduciary Folly? (Ennis and Parkhill, 1986); a range of views emerge across the archive, including on the ethics of divestment: discussion in Ethics in Investment: Divestment (Hall, 1986) includes the issues faced by public pension funds and endowment funds in determining whether to divest according to non-financial rationales.

To read Environment, Social, and Governance Issues and the Financial Analysts Journal in full, please visit here.

Other articles in the Anniversary Perspectives series are:

• The Financial System Red in Tooth and Claw: 75 Years of Co-Evolving Markets and Technology (Andrew W. Lo)
• The Efficient Market Hypothesis, the Financial Analysts Journal, and the Professional Status of Investment Management (Steven J. Brown, PhD)
• The Financial Analysts Journal and Investment Management (William N. Goetzmann)
• Seventy-Five Years of Investing for Future Generations (David Chambers, Elroy Dimson, FSIP, PhD, Charikleia Kaffe)

For further information or to speak to the author(s) of the Anniversary Perspectives, please contact [email protected].

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