Towards a Process Model of Responsible Investment

After the description of responsible investment, its various manifestations and its link to CSR in chapter two, this chapter looks at how responsible investment as a driver for CSR may be theoretically conceptualized. In general, the practice of responsible investment involves two parties: the institutional investor and the corporation, represented by the corporate management. Thus, to understand and analyze the impact of institutional investors on the social responsibility of the corporations in which they invest, it is essential to look at

how they relate

(Martin et al., 2007). We will start this chapter by reviewing how previous authors have commented on the relations between investors and managers in general, before we then outline the limitations of this way of research for the study of responsible investment. Based on these insights and those from sensemaking studies (Weick, 1995a, 1979) as underlying theory we will then derive new ideas on how to conceptualize responsible investment as a driver of CSR. This chapter closes with a theoretical framework that will guide us through our subsequent analysis.