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

Research output: Contribution to journal › Article › peer-review

14 Citations (Scopus)

173 Downloads (Pure)

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
Pages (from-to)	645-661
Number of pages	17
Journal	Environment and Planning A: Economy and Space
Volume	56
Issue number	2
Early online date	28 Feb 2023
DOIs	https://doi.org/10.1177/0308518X231155484
Publication status	Published - Mar 2024

Keywords

Asset management
ESG metrics
finance
legitimacy
sustainable finance

ASJC Scopus subject areas

Geography, Planning and Development
Environmental Science (miscellaneous)

Access to Document

10.1177/0308518X231155484Licence: CC BY

Download pdf
© The Author(s) 2023.
Final published version, 567 KBLicence: CC BY

Cite this

@article{b09efeec929344bd9ba13749cae078e8,

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.",

keywords = "Asset management, ESG metrics, finance, legitimacy, sustainable finance",

author = "Clark, {Gordon L.} and Dixon, {Adam D.}",

note = "Funding Information: The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the H2020 European Research Council (grant number 758430). Funding Information: The authors wish to acknowledge the support of their universities, related research programs on finance, investment and climate change, the support of European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement no. 758430), and the inspiration provided by Rob Bauer, Christopher Brown, Noel Clark, Tessa Hebb, Alex Money, Ashby H.B. Monk, Aisha Saad and Dariusz W{\'o}jcik. It was first presented and discussed at a workshop organised by Brett Christophers and Benjamin Braun and hosted by the Max Planck Institute for the Study of Societies. The authors are grateful for the comments of discussants. Publisher Copyright: {\textcopyright} The Author(s) 2023.",

year = "2024",

month = mar,

doi = "10.1177/0308518X231155484",

language = "English",

volume = "56",

pages = "645--661",

journal = "Environment and Planning A: Economy and Space",

issn = "0308-518X",

publisher = "Sage",

number = "2",

}

TY - JOUR

T1 - Legitimacy and the extraordinary growth of ESG measures and metrics in the global investment management industry

AU - Clark, Gordon L.

AU - Dixon, Adam D.

N1 - Funding Information: The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the H2020 European Research Council (grant number 758430). Funding Information: The authors wish to acknowledge the support of their universities, related research programs on finance, investment and climate change, the support of European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement no. 758430), and the inspiration provided by Rob Bauer, Christopher Brown, Noel Clark, Tessa Hebb, Alex Money, Ashby H.B. Monk, Aisha Saad and Dariusz Wójcik. It was first presented and discussed at a workshop organised by Brett Christophers and Benjamin Braun and hosted by the Max Planck Institute for the Study of Societies. The authors are grateful for the comments of discussants. Publisher Copyright: © The Author(s) 2023.

PY - 2024/3

Y1 - 2024/3

N2 - 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.

AB - 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.

KW - Asset management

KW - ESG metrics

KW - finance

KW - legitimacy

KW - sustainable finance

UR - http://www.scopus.com/inward/record.url?scp=85150030080&partnerID=8YFLogxK

U2 - 10.1177/0308518X231155484

DO - 10.1177/0308518X231155484

M3 - Article

AN - SCOPUS:85150030080

SN - 0308-518X

VL - 56

SP - 645

EP - 661

JO - Environment and Planning A: Economy and Space

JF - Environment and Planning A: Economy and Space

IS - 2

ER -

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

Abstract

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this