How Investors Can (and Can't) Create Social Value

How Investors Can (and Can't) Create Social Value

By
Paul Brest, Ronald Gilson, Mark A. Wolfson
Journal of Corporation Law.
2019, Vol. 44, Issue 2, Pages 205

Most investors throughout the world have a single goal: to earn the highest risk-adjusted financial returns. They would not accept a lower financial return from an investment that also produced social benefits.

More recently, an increasing number of socially-motivated investors have goals beyond maximizing returns. They also seek to align their investments with their social values (value alignment), and some also seek to cause the companies in which they invest to create more social value as a result of their investment (social value creation). We show in this essay that while it is relatively easy to achieve value alignment, creating social value is far more difficult.