Philosophical issues in responsible investment: a care-ethical approach

Abstract

Purpose

This paper aims to examine ethical investment problems related to fiduciary responsibilities.

Design/methodology/approach

The present study discusses these issues from the perspective of stock investment. It identifies, validates and explains the ethical problems and possibilities concerning the principles of responsible investment. The paper focuses on, but is not restricted to, the United Nations-backed Principles for Responsible Investment.

Findings

The United Nations-backed Principles for Responsible Investment give investors moral freedoms, although from the point-of-view of most moral theories, only such investments that serve the well-being of people and the environment would be ethically responsible. The legitimacy of fiduciary responsibilities is motivated by the pursuit of economic gain, which is essential for business on the one hand but ethically problematic on the other, if the “invisible hand” of the economy does not work and wealth accumulates in the hands of only a few people.

Research limitations/implications

This vision presented in the paper (albeit practically relevant) is obviously general and many details, including the starting points of the care-ethical approach and the moral rating of stock portfolios, need to be developed further.

Practical implications

The vision proposes, in essence, a care-ethical approach according to which only such investments that promote the general good and welfare are morally acceptable. From this perspective, investment should primarily serve people and the environment, and therefore investments should only be made, based on a careful evaluation, in ethically acceptable and economically profitable companies that contribute to the human and environmental good.

Originality/value

This subject matter has been much discussed; however, the perspective and starting points of this article, especially the ethics of care, are new and add novel ideas to the conversation.

Citation

Juhani Lehtonen, T. (2013), "Philosophical issues in responsible investment: a care-ethical approach", Social Responsibility Journal, Vol. 9 No. 4, pp. 589-602. https://doi.org/10.1108/SRJ-08-2012-0087