| How and why do private governance arrangements originate in world politics and what role do financial actors and instruments have in this process? The following study attempts to answer this by exploring the emerging global governance of climate change involving (exclusively or primarily) non-state actors, i.e. organized amongst elements of business and/or civil society. Scholars are only now beginning to address questions of private governance that they have been asking of international public governance mechanisms for years: How do they originate? Who are the key actors in these and what power do they have and how is it exercised? What role, if any, does the state have in their development? What are their characteristics, the differences amongst them? To what extent are they effective? The study argues that a key impetus to the creation and dissemination of these mechanisms is the financial sector and specifically the growing global phenomenon of socially responsible investment (SRI), which increasingly has designs on re-defining the social responsibility of corporations, including the impact of business behavior on the environment. It explores how the rise of SRI has resulted in the emergence of a number of what I call 'investor-driven governance mechanisms' (IDGMs) concerned with the problem of global warming; these share a central actor--- institutional investors---but exhibit varying characteristics, including the extent of involvement by civil society organizations and the extent to which their creation and effectiveness are affected by the actions of public authority (states and intergovernmental agencies). Three case studies of IDGMs are evaluated in order to test hypotheses concerning their creation and development. The conclusions of this research strongly suggest that without the continued pressure and active participation of civil society in investor-led private governance arrangements, or without governments enacting legislation to strengthen corporate governance and related standards, the future of IDGMs are likely to be only as a marginal influence in addressing the problem of climate change. |
