Legitimacy and the extraordinary growth of ESG measures and metrics in the global investment management industry

Gordon L. Clark; Adam D. Dixon

doi:10.1177/0308518X231155484

Legitimacy and the extraordinary growth of ESG measures and metrics in the global investment management industry

Gordon L. Clark, Adam D. Dixon^*

^*Corresponding author for this work

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Abstract

ESG metrics are increasingly important in the global investment management industry. Why this came to pass given the limited appetite for responsible investing in the industry is the subject of this paper. Although the business case for ESG provides an explanation for its increasing uptake whereby market actors are increasingly convinced of the merits of ESG as a profit centre, this explanation is insufficient. By contrast, the adoption the ESG programme offers a means of rewriting the terms of risk management and value creation that while grounded in the business case also serve to address challenges to the legitimacy of the global asset management industry. These developments are illustrated in a case study of the establishment and growth of TruCost and its purchase by S&P Global in 2016.

Original language	English
Journal	Environment and Planning A: Economy and Space
Early online date	28 Feb 2023
DOIs	https://doi.org/10.1177/0308518X231155484
Publication status	E-pub ahead of print - 28 Feb 2023

Keywords

Asset management
ESG metrics
finance
legitimacy
sustainable finance

ASJC Scopus subject areas

Geography, Planning and Development
Environmental Science (miscellaneous)

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title = "Legitimacy and the extraordinary growth of ESG measures and metrics in the global investment management industry",

abstract = "ESG metrics are increasingly important in the global investment management industry. Why this came to pass given the limited appetite for responsible investing in the industry is the subject of this paper. Although the business case for ESG provides an explanation for its increasing uptake whereby market actors are increasingly convinced of the merits of ESG as a profit centre, this explanation is insufficient. By contrast, the adoption the ESG programme offers a means of rewriting the terms of risk management and value creation that while grounded in the business case also serve to address challenges to the legitimacy of the global asset management industry. These developments are illustrated in a case study of the establishment and growth of TruCost and its purchase by S&P Global in 2016.",

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Legitimacy and the extraordinary growth of ESG measures and metrics in the global investment management industry

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Keywords

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