ESG Integration Treats Ethics as Risk,but Whose Ethics and Whose Risk? Responsible Investment in the Context of Precarity and Risk-Shifting

Abstract

This article contributes to scholarly debates about the relationship between precarity and financialization by applying Randy Martin’s concept of the social derivative to the phenomenon of responsible investment. It explores how responsible investment emerges as an avenue for political action in the context of disintermediated governance. Analyzing one strategy of responsible investment, the integration of environmental, social, and governance (ESG) risks into investment decision making, through the frame of the social derivative, the article argues that a derivative logic of ethics underpins ESG risk management. This complicates contemporary understandings of precarity as risk-shifting, because ESG integration creates connections between unlikely parties, opening up new forms and directions for political contest through finance. However, the article reveals that the contingent and profit-driven ethics on which ESG risk management is based establishes a narrow foundation on which these contests take place.

Keywords

Derivative finance financialization precarity responsible investment risk

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