Socially responsible investment
A Henderson case study

Page 1: Introduction

In the business world, ‘investment’ has two separate but related meanings. For many producers, ‘investment’ means spending money in ways that add to the capital stock of the business, e.g. by extending factory buildings or office buildings, or modernising machinery. Businesses finance this investment either out of profits, through borrowing or by attracting funds through...
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Page 2: Sustainable economic growth

SRI is concerned with identifying and investing in companies that are taking a responsible approach towards their own growth and to economic growth in general. When politicians talk about delivering economic growth, they are looking to increase the amount of goods and services produced. However, people are increasingly expressing doubts and fears about economic policies aimed at increasing current...
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Page 3: Socially Responsible Investment (SRI)

Socially Responsible Investment is one important way of encouraging and supporting firms   that are already taking a responsible approach towards their contribution to sustainable economic growth. SRI is also a good way of persuading firms to change their ways. Henderson Global Investors believes that SRI is one of the most effective ways of bringing about a change in attitude. Henderson...
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Page 4: The contribution of SRI to promoting sustainable growth

Henderson Global Investors believes that it is in a good position to influence how companies conduct their business.  This is because: Companies need sources of investment funds in order to survive Companies need a healthy share price to attract further investment funds. If institutional investors stop holding a particular company’s shares, that company’s stock market valuation...
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Page 5: Working together

The media tends to portray the process of persuading firms to adopt responsible business practices as wholly confrontational: banners on factory chimneys and gallant little ships crossing the bows of industrial giants. Such stories bring issues to public attention, but they give a misleading impression of the major forces that are driving firms to change the way they operate. People who believe in...
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Page 6: Conclusion

When a business adopts a broader view of its economic, social and environmental responsibilities it is serving the interests not only of society as a whole but of itself as well. Henderson Global Investors is succeeding in putting this message across to the companies with which it deals when building up its SRI portfolio. It is also being increasingly successful in convincing its own clients...
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