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Social Innovation pp 229–237Cite as

Responsible Investing as Social Innovation

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Part of the book series: CSR, Sustainability, Ethics & Governance ((CSEG))

Abstract

The 2008 financial crisis led to an enormous loss of financial assets. Exuberant profits in the private sector before the crisis were followed by immense public costs, caused in particular by a rise in unemployment. Apart from this, the precrisis financial system can generally be characterized by high private incomes, on the one hand, and immense negative externalities, on the other hand. Responsible investing (RI) attempts to reduce this burden and decrease negative externalities. Initiated mainly by entrepreneurs from outside the financial sector, it can be considered an innovation responding to a pressing societal problem, a social innovation. The main idea of RI is quite easy, to broaden the perspective of investors from a narrow focus on purely financial indicators to a broader focus which integrates nonfinancial aspects, such as social, ecological, or ethical ones into the investment process. RI aims to develop tools that financial firms use to recognize, assess, and implement these non-financial concerns into their investment processes.

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Notes

  1. 1.

    Financial support for the author was provided by The Volkswagen Foundation.

  2. 2.

    Definition of social innovation from the Center for Social Innovation, University of Stanford, http://csi.gsb.stanford.edu/social-innovation. Accessed 05 Sept 2012.

  3. 3.

    Parts of the following sections are based on Hiss (2011).

  4. 4.

    For an overview of RI see Bettignies and Lépineux 2009; Fung et al. 2010; Louche and Lydenberg 2011; Sullivan and Mackenzie 2006.

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Author information

Authors and Affiliations

  1. Department of Sociology, Friedrich Schiller University Jena, Bachstr, 18k, 07743, Jena, Germany

    Stefanie Hiss

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  1. Stefanie Hiss
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Correspondence to Stefanie Hiss .

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Editors and Affiliations

  1. Intel Corp., Dornacher Str. 1, Feldkirchen, 85622, Bayern, Germany

    Thomas Osburg

  2. Centre for Humane Market Economy, Schlossallee 9, Puch, 5412, Austria

    René Schmidpeter

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Hiss, S. (2013). Responsible Investing as Social Innovation. In: Osburg, T., Schmidpeter, R. (eds) Social Innovation. CSR, Sustainability, Ethics & Governance. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36540-9_20

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