Stakeholders in ecological crises: what role for financial institutions?

Abstract

Everywhere the call is out for ‘stakeholder’ involvement as a means for improving developmental decisions, particularly those involving complex technology, uncertain risks, and contending values. Everywhere but in funds management, it would seem. Despite the presence of obligations under policy instruments such as the Kyoto Protocol, funds management sectors around the world (comprising pooled investment schemes such as hedge funds, pension funds, insurance companies and mutual funds) have been excluded from ecological crisis management discussions. Moreover, the interests of the ultimate beneficiaries of these fiduciary vehicles have not been factored in climate-change discussions and have not participated to any material extent in the mechanisms of the UNFCCC. This article examines the prevailing financing system of environmental pollution management and, on the basis of a series of interviews with investment-related stakeholders, discusses the institutional realities that impact the participation of the investment sector.