The Importance of the Legal and Regulatory Framework for the Development of Socially Responsible Investing: Evidence from the Netherlands

Abstract

Goal – the purpose of the article is to identify trends associated with the functioning of the socially responsible investing market in the Netherlands compared to other European Union countries and the role the legal and regulatory framework adopted at the national level may play in the development of this form of investing. Research methodology –various methods of research were used in this paper, such as the method of desk research consisting of an analysis of data on socially responsible investing published by Eurosif and EFAMA and the analysis of the legal and regulatory framework in the field of socially responsible investing, established by public authorities, regulatory institutions, non-governmental organizations, business representatives, and the investor community. Score/results – the conducted studies showed that the Netherlands is a country that not only stands out from other European Union countries in terms of the level of socially responsible investing, but it is also characterised by a large range of legal and regulatory framework in this field, as well as a long history of its implementation. A characteristic feature of the legal and regulatory framework established over the years in this country is also its great complexity. It contains several mandatory requirements and voluntary recommendations regarding the principles that institutional investors should adhere to when investing capital. A significant role in developing socially responsible investing in this country was also played by the fiscal instruments and the solutions enabling comparison of investment practices of selected institutional investors. ‣‣ Originality/value – the article intends to fill the research gap in the field of socially responsible investing and the factors that may stimulate its development in individual capital markets. This aspect is still underrepresented in research, yet it is increasingly important. Understanding the factors stimulating the development of this form of investing may be key to eliminating the territorial differentiation in this area. This paper provides a starting point for further research. Therefore, the focus is solely on one country and one factor that may influence the development of this form of investing in individual capital markets.