Perceptions of asset managers on corporate social responsibility challenges and opportunities

Purpose: Companies and investors in South Africa are challenged with multiple sustainability concerns. Asset managers have substantial power to motivate investee companies to focus on pressing corporate social responsibility (CSR) issues. Yet, there is limited scholarly evidence on how they process CSR information and which sustainability considerations influence their decisions. Therefore, the CSR challenges and opportunities that selected South African asset managers experience were explored. Design/methodology/approach: Semi-structured interviews were conducted with 26 South African asset managers. Thematic analysis was conducted to derive four main themes. Findings/results: Four considerations were identified on which the considered asset managers based their responsible investment decisions when reflecting on CSR practices. Firstly, CSR should form part of a company’s primary purpose. Secondly, the interviewees focussed on material industry-specific CSR risks when making investment decisions. Thirdly, the inclusion of CSR practices in asset managers’ decision-making was hindered by the relatively small South African investable market, a limited demand for responsible investments from asset owners and beneficiaries, and insufficient disclosure of material sustainability information. Lastly, the interviewees highlighted social and economic infrastructure investment opportunities. Furthermore, they mentioned that CSR practices can be improved by refined regulation and educating asset owners and beneficiaries. Practical implications: Corporate leaders are urged to increasingly engage with asset managers and collaborate with stakeholders from the private sector to address prominent sustainability issues and to capitalise on related opportunities. Originality/value: This research contributes four considerations to the limited body of knowledge on the unique CSR challenges and opportunities pertaining to the investment decisions of an influential stakeholder group, namely asset managers in South Africa. Keywords: CSR; asset managers; investment challenges; investment opportunities; qualitative research; South Africa; sustainability; responsible investment.