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German ethical banks have experienced a significant increase in customers, deposits, and lending. They aim to establish a fairer banking system. But the simultaneous pursuit of social, ecological, and economic goals leaves them vulnerable to conflicting orders of worth. The authors examine the normative foundations that ethical bank employees refer to when they describe their everyday practices and identify the specific problems that arise from negotiating between moral principles and economic demands to provide insights into the impacts, constraints, and paradoxes of normatively oriented business practices. Drawing on the theoretical framework of the sociology of critique, the authors assume that moral categories, social processes of interpretation, and justification are an essential part of markets. Ethical banking is characterized by the need to meet both market-limiting and market-expanding requirements, and this particularly becomes contentious when dealing with economic growth. By analyzing ethical banks’ freely accessible documents, the authors first outline the institutional guidelines. In a second step, the authors analyze 27 qualitative interviews with employees of ethical banks to gain insights into everyday lending practices and action-guiding normative orientations. The goal of this chapter is to examine the tensions that may arise from applying normative guidelines under the condition of increasing economic requirements and to disclose the way that ethical banks negotiate between mechanisms of expansion and limitation. The analysis of this chapter points out a paradox of ethical banking: due to the banks’ economic expansion, investments corresponding to their ethical commitments tend to become a luxury they cannot afford.

The purpose of this paper is to analyze investor reactions to ethical screening by pension plan managers.

The author presents a sample consisting of data corresponding to 573 pension plans in relation to such aspects as financial performance, inception date, asset size, number of participants, custodial and management fees, and whether their managers adopt ethical screening or give part of their profits to social projects. On this data the author implements the fixed effects panel data model proposed by Vogelsang (2012).

The results obtained indicate that investors/consumers prefer traditional or solidarity pension plans to ethical pension plans. Furthermore, the findings show that ethical investors/consumers are more (less) sensitive to positive (negative) lagged returns than caring and traditional consumers, causing traditional consumers to contribute to pension plans that they already own.

The author does not know what types of environmental, social and corporate governance criteria have been adopted by ethical pension plan managers and the weight given to each of these criteria for selecting the stock of the firms in their portfolios that could influence in the investors’ behaviour.

The results obtained in the current paper show that investors invest less money in ethical pension plans than in traditional and solidarity pension plans; this could be due to the lack of information for their part. To solve this, management companies could increase the transparency about their corporate social responsibility (CSR) investments to encourage investors to invest in ethical products so these lead to raising CSR standards in companies, and therefore, sustainable development.

The Spanish socially responsible investment retail market is still at an early phase of development, and regulators should promote it in order to encourage firms to adopt business activities that take into account societal concerns.

This paper provides new evidence in a field little analysed. This paper contributes to the existing literature by focusing on examining the behaviour of pension funds investors whose investment time horizon is in the long-term while previous literature focus on analysing behaviour of mutual fund investors whose investment time horizon is in the short/medium term what could cause different investors’ behaviour.

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

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.

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.

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.

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.

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.

The aim of this chapter is to propose a critical analysis of socially responsible investing (SRI) through debate and reconstruction. Our goal is therefore to try to understand how the definition of ethics in finance has steered SRI towards a financial approach where ethics is guided by finance.

This chapter proposes a two-point approach consisting of a meta-debate and development perspectives. Each approach is divided into three debates (ideological and philosophical, scientific and practical), which are interconnected.

The chapter concludes that the debate on mainstream SRI is necessary but should be re-discussed, as it is preventing in its current form the concept from developing and being grounded in real ethical values, sacrificing the individual ethics that should be driving investing decisions.

The chapter proposes to rethink the paradigm around SRI through a conceptual framework that re-inserts finance within ethics, where non-financial performance and impact investment should be at the centre of the scientific debates, leading to an SRI based on exclusion, the consideration of controversies and social impact measurement.

The purpose of this paper is to determine the extent to which social, ethical and environmental (SEE) disclosure is being integrated into institutional investment. The aim is also to investigate the interplay between private and public SEE disclosure.

The paper uses a grounded theory methodology involving interviews with 21 members of the UK institutional adjustment community.

The paper found that institutional investors did not consider that public SEE disclosure was adequate for their portfolio investment decisions, suggesting that SEE disclosure was decision‐useful. Consequently, this perceived market failure in public SEE disclosure has been supplemented by the development of sophisticated private SEE disclosure channels. Further, the interviews indicated that this private SEE disclosure process was becoming dialogic in nature, since not only were institutional investors initiating the engagement process with companies but also companies were starting to request information on the SEE disclosure required by institutional investors. This finding contrasts with previous work which found that the private disclosure process in financial reporting was essentially user‐oriented and uni‐directional.

This paper highlights the importance of SEE disclosure to a crucial user group, institutional investors. The research contributes to the SEE disclosure literature by revealing details of the evolving private SEE disclosure process for the first time.

The purpose of this paper is to evaluate the marketing of ethical and socially responsible investment (ESRI) funds to retail investors and to analysis the plausibility of the claims made in regard to their performance, achievements and prospects.

The paper presents an analysis of the claims and marketing strategy adopted in the ESRI industry's Action Guide for Financial Advisors document, produced for their National Ethical Investing Week, 2010.

The analysis indicates that the ESRI fund industry's Action Guide uses a number of unethical marketing techniques to induce retail investors into investing in ESRI funds and that many of the claims made on behalf of ESRI investing are implausible. Given the past history of mis‐selling in the investment fund sector, these findings ought to be of some concern to regulators and retail investors.

This is the first article that has linked the promotion and marketing of ESRI funds to possible mis‐selling practices.

This chapter describes a number of the ethical, political, and sustainability implications inherent in the investment process; clarifies when and to what extent these implications can manifest themselves; and examines the circumstances under which trustees might wish to consider the relation these implications to the management of their assets.

The arguments made in the chapter are theoretical and based on analyses of historical concepts of fiduciary duty and investment management.

The chapter concludes that in seeking to achieve their primary tasks of acting in beneficiaries’ interests and preserving assets and income, trustees may wish to consider the ethical, political, and sustainability implications of their investment decisions in the light of broadly accepted norms or scientific consensus. If trustees choose to incorporate these considerations, their decisions should be commensurate with the levels of concern raised by these issues, be potentially effective, not impair financial goals, and not require excessive expenditure of resources.

The conclusions of the chapter imply that trustees acting on beneficiaries’ behalf may wish to assess the broad-based, value-creation potential of their investment decisions along with the potential of these decisions to impact portfolio performance relative to asset-specific benchmarks. Considerations of value creation can be in beneficiaries’ interests to the extent that they contribute to strong economies, safe and livable societies, and the preservation or enhancement of natural resources. Additional research is needed to elaborate on how consideration of these types of value creation affects asset allocation and specific security selection, along with its impacts on short-term and long-term financial returns.

This chapter reflects on the role of ethical, political, and sustainability (EPS) concerns in investment processes. Specifically it considers why, when, and how EPS concerns might be considered by trustees.

This study aims to study the impact of corporate governance (CG) versus ethical investment on the firm performance. It takes into account the firms of Bangladesh, India, and Pakistan for the purpose of the study. A composite variable of CG index and environmental, social, and governance (ESG) index is used to test the impact on the firm performance. Separate country wise and overall analysis is obtained. Regression analysis is used to obtain the results. Two measures of performance are used, one is return on assets (ROA) and other is Tobin Q. The findings of the study reveal that there is an impact of corporate governance index (CGI) on firm performance (overall and country wise) whereas ethical investment (EI) has an impact on firm performance when tested overall and no impact when checked for country wise results. The results further show that on country level, increase in CG measures may lead to positive results, but at the macro level, it may lower the performance. On the other hand, at the micro level, ethical finance may not show its impact; however, at the macro level, it has an impact. The study has implications for the investors and policymakers.

This study aims to empirically investigates the effect of the COVID-19 pandemic on ethical and nonethical stocks in Indonesia. Ethical stocks which are characterized by moral-based companies’ activities and lower debt are expected to have better resilience during the COVID-19 crisis compared to nonethical stock.

This study observes 589 firms of ethical and nonethical stock during sample periods ranging from March 2, 2020 (first case announced) to June 30, 2021. Panel regression, with some control variables, was applied.

Testing firms in Indonesia revealed a significant difference in stock resilience, in which ethical stock has a better resilience compared to nonethical, with Islamic socially responsible investment (SRI) stock having the highest resilience, followed by Islamic stock and then SRI stock. This study documents a significant effect of some financial criteria on the stock resilience, namely, return market (RM), market capitalization (MCAP) and share turnover (TURN). Overall, after splitting the sample into different time horizons, this study consistently reveals that ethical firms have better resilience compared to nonethical stocks.

This study makes several contributions to the literature on Islamic finance, especially concerning Islamic screening with SRI factors. In practical terms, this study supports the argument that focusing on integrating environmental, social and governance criteria in sharia screening will improve the quality of Islamic firms. The “Islamic” label is not only a marketing label but also a quality certification.

This study can be used as a reference for developing Islamic finance more focused on sustainability issues including socioeconomic and human development by improving the quality of screening of Islamic firms. Therefore, this study suggests that the establishment of Islamic SRI index is very crucial and significant to promote ethical-based investment.

The study examines the diversity of ethical motivations for investments in fossil fuels amid growing calls to decarbonize. Faced with the dilemma between energy needs and net-zero commitments, managers need to reconcile seemingly irreconcilable external pressures. The purpose is to provide insights into the ethics justifying their investment decisions.

The authors draw on ethnographic research, participant observation and interviews with oil and gas executives, private equity partners, managing directors, bankers, lawyers, consultants and engineers in the US and the UK.

The findings show how managers in the oil and gas ecosystem motivate their actions in response to external pressures for decarbonization. The leitmotif is that they do the right thing even if they acknowledge that not all stakeholders agree. The findings provide insights into why net-zero pledges have failed to stem the flow of capital into fossil fuels.

The authors propose a nuanced engagement with stakeholders that goes beyond risk-return calculations on investments in hydrocarbons. Recognizing the diversity of ethical perspectives, money managers have the opportunity to engage institutional constituents as owners of the collective pools of capital rather than just as beneficiaries in making investment decisions.

Money managers should be more engaged with stakeholders whose well-being depends on the funds' investments. They could facilitate the creation of partnerships with public and private organizations such as banks, national funds, city governments, pension funds, foundations, universities and religious organizations. It would be beneficial to all stakeholders to understand the nuanced and varied ethical frameworks that inform hydrocarbon investment and divestment decisions.

The article uses timely in-depth interview data on an issue of existential importance. The authors contribute a better understanding of how and why institutional investor capital is flowing into hydrocarbons at a time when calls to divest are louder than ever.