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American University Washington College of Law




The debate about the desirability and efficacy of socially responsible investing (SRI) is about as old as the practice of investing itself. Indeed, in spite of a persistent inability on the part of all participants in the debate to develop a simple, coherent definition of what is meant by socially responsible investing, the debate continues. Many funds that purport to engage in SRI have surprisingly little in common. However, if a single political issue could be said to have attracted the attention of virtually every socially responsible fund currently in existence, it would have to be South Africa's abhorrent practice of apartheid. Current political developments in that country and the abandonment of economic sanctions against the country by the United States, the European Community, Israel, and others have ignited debate about the usefulness of punitive measures as a means to prevent capital from finding its way to a variety of otherwise attractive projects.Consequently, it is an appropriate moment in which to assess the merits of social investment as both an income-producing tool and an instrument for political coercion.

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