A STUDY ON THE ETHICAL CONSIDERATIONS IN INVESTORS' INVESTMENT DECISIONS (original) (raw)

Developing Conceptual Framework of Ethical Investment Studies

CERN European Organization for Nuclear Research - Zenodo, 2022

The study aims to conduct a conceptual review of ethical investment research based on Widyawati (2019). Through the conceptual review method, the research obtained 70 relevant articles. The results of the literature analysis conclude that there is a development of ethical investment studies and in general it is divided into four main themes, namely (i) investor behavior studies, (ii) ethical investment development studies, (iii) ethical investment performance studies and (iv) ethics and religiousbased investment studies (stock of sin stocks category). The studies of investor behavior focuses on examining the characteristics of ethical investors such as motivation, investment patterns and the basis for making investment decisions. The studies of ethical investment development emphasizes the description of ethical investment in a particular area, the argumentation of ethical investment theory and the role of participants in the ethical investment market, including ethical investment mechanisms, namely screening and shareholder activism. The studies of ethical investment performance focus on the performance by comparing the return on ethical investment with its benchmark (nonethical investment). Meanwhile the studies of ethical and religious-based investment (stock of sin stocks category) focuses on testing implementation of negative screening of sin stocks, testing the performance of sin stocks and testing the relationship between sin stocks with certain themes.

Are ‘Ethical’ or ‘Socially Responsible’ Investments Socially Responsible

Journal of Business Ethics, 2006

In this article we discuss whether it pays to invest ethically. Our aim is to examine corporate social responsibility from philosophical, moral and practical points of views. We focus on two main issues related to ethical investments. Firstly we discuss the moral dilemma of how capitalism has changed its shape in today’s world and from ‘blaming the business’ there is a general attempt to use the markets to promote ethics values and corporate social responsibility. Secondly, we analyze the growth of ethical investment funds in the UK today, and their performance, and highlight some of the institutional investors involved in the management of ethical funds. We discuss whether ethical investments really succeed in reducing the conflict between profit-making and social responsibility as they promise or whether they use commercial rhetoric and market mechanism to merely sell us our own perceived values back. We conclude that the paper has a key contribution in setting the scene for future research in an area that is evolving and of fundamental importance to companies, investors and various stakeholder groups.

35 years of socially responsible investing (SRI) research: General trends over time

South African Journal of Business Management, 2012

This article describes 35 years of academic research into investment practices that in some way integrate a consideration of environmental, social and corporate governance issues. A review of 190 academic papers was undertaken to identify trends in five domains, namely ‘Primary Name’, ‘Research Themes’, ‘Ethical Foundations’, ‘Research Approach’ and ‘SRI Strategies’. The evidence reveals that more than half the researchers refer to such investment practices as Socially Responsible Investing (SRI) and for this reason the name is used in this review as a generic term for the genre. A myriad of other names were also identified. In terms of research themes, one particularly dominant theme was that of financial performance, which was often discussed in relation to fiduciary responsibility and legal aspects. Although the primary ethical foundation was not always directly observable, the majority of papers implied utilitarianism or ‘the greatest good for the greatest number’. Increased men...

Socially Responsible Investors

Handbook on Ethics in Finance, 2020

Differences in investor motivations have been largely neglected as a topic in the literature on socially responsible investment. Most research studies consider all investors as a homogeneous group. This chapter aims to contribute to the strand of literature that focuses on dissimilarities. Particular attention is given to motivations that drive individual investors toward socially responsible investment. Motivations, in fact, may influence the financial instruments chosen, the strategy adopted, the amount of money invested, and the level and direction of the tradeoff between the two main sources of utility for ethical investors, which are ethics and profit.

Guidelines for Integrating Socially Responsible Investment in the Investment Process

SSRN Electronic Journal, 2000

Our analysis shows that SRI strategies can be grouped in ethically-based, investment-driven and value-ensuring objectives. We demonstrate that this categorization strengthens decisionmaking in SRI. Based on our literature review, we recommend tools and processes for successful implementation of SRI-strategies.

Ethical Investment Processes and Outcomes

Journal of Business Ethics, 2000

There is a growing body of literature on ethical or socially responsible investment across a range of disciplines. This paper highlights the key themes in the field and identifies some of the major theoretical and practical challenges facing both scholars and practitioners. One of these challenges is understanding better the complexity of the relationship between such investment practices and corporate behaviour. Noting that ethical investment is seldom characterised by agreement about what it actully constitutes, and that much of the extant research focuses on a narrow set of issues, the paper argues that there are benefits associated with examining ethical investment as a process.

The Risk and Performance of Ethically Compliant Investment

2020

This paper presents a discussion of prior literature on the risk and performance of ethically compliant equity. This review of literature provides an organised evaluation of the available studies in ethical investment. In particular, this paper presents surveys of literature concerning shariah-compliant equity and socially responsible investments. The discussion of the literature synthesises the information in the respective studies into a summary. Each subsection provides an analysis of the information gathered by first providing an overview of the current empirical studies and, second, identifying gaps and showing the limitation of theoretical views in the existing studies. Discussion in previous literature emphases only one type of ethical investment, however, this paper, on the other hand, covers both the religious and social perspectives of ethics, which provide a more comprehensive view of ethics. The paper finds out that studies on the risk and performance of ethically compli...

A Comparison of Socially Responsible and Conventional Investors

Journal of Business Ethics, 2004

Socially responsible investment is a rapidly emerging phenomenon within the field of personal investment. However, the factors that lead investors to choose socially responsible investment products are not well understood, especially in an Australian context. This study provides a comparative examination of conventional and socially responsible investors, with the aim of identifying such factors. A total of 55 conventional investors and 54 ethical investors participated in the study by completing mailed questionnaires about their investment and general behaviour and their attitudes and beliefs. Results indicated some important differences between socially responsible and conventional investors in their beliefs of the importance of ethical issues, their investment decision-making style, and their perceptions of moral intensity. These results support the notion that socially responsible investors differ in critical ways to conventional investors, and are discussed in terms of theoretical and practical implications.