Book contents
- Reviews
- The Ethics of ESG
- The Ethics of ESG
- Copyright page
- Contents
- Figures and Tables
- Contributors
- Acknowledgments
- Abbreviations
- Introduction
- 1ESG as Dead and Alive
- 2Ethics by Proxy?
- 3What Is the Purpose of ESG?
- 4The Square Peg
- 5Success, Law, and ESG
- 6Reforming ESG Ratings
- 7Responsibilization of Business and the Informational Ethics of ESG
- 8The Ethics of ESG Integration
- 9The Ethical Quandary of Monetary Valuation in ESG Impact Measurement
- Index
- References
2 - Ethics by Proxy?
An Agency-Theoretic Analysis of ESG Investment
Published online by Cambridge University Press: 27 December 2025
Book contents
- Reviews
- The Ethics of ESG
- The Ethics of ESG
- Copyright page
- Contents
- Figures and Tables
- Contributors
- Acknowledgments
- Abbreviations
- Introduction
- 1ESG as Dead and Alive
- 2Ethics by Proxy?
- 3What Is the Purpose of ESG?
- 4The Square Peg
- 5Success, Law, and ESG
- 6Reforming ESG Ratings
- 7Responsibilization of Business and the Informational Ethics of ESG
- 8The Ethics of ESG Integration
- 9The Ethical Quandary of Monetary Valuation in ESG Impact Measurement
- Index
- References
Summary
Critics of environmental, social, and governance (ESG) investment have argued that business managers should be concerned with maximizing profits rather than getting involved in politics. Defenders of ESG have responded by arguing that investors are free to put their money wherever they like, and so ESG investment practices represent an ordinary exercise of commercial freedom. This simple response glosses over an important complication, which is that the relationship between investors and business managers is mediated by a set of agency relationships, between investors and fund managers, and between fund managers and corporate boards. These agency relations are not completely open-ended but rather are subject to constraints. A question arises about whether any of the political demands associated with ESG investment practices exceed the proper limits of these agency relationships. This chapter assesses this question in order to determine whether ESG leads agents to violate any duties arising from their relations to principals.
Information
- Type
- Chapter
- Information
- The Ethics of ESGCritically Assessing the Environmental, Social and Governance Movement, pp. 51 - 74Publisher: Cambridge University PressPrint publication year: 2026
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