Abstract
In the present times of financial crisis and economic turmoil, many people are worried about their investments. A rather straightforward and understandable worry concerns what will happen to the particular investments one currently holds, or those held before the onset of the turmoil, and whether there will be anything left of these once the crisis is over. A more strategic worry, however, is how to invest so to avoid the kind of ethical problems in the future (e.g., the taking of unreasonable financial risks) which generally are thought to, at least partly, have given rise to the crisis. One possibility some investors may be looking at here is the kind of investing which is the topic of this book – so-called ‘ethical’, ‘responsible’ or ‘socially responsible’ investment (SRI). Over the last decade or so, an increasing number of banks and fund companies have launched investment vehicles with an explicit ‘ethical’, ‘social’ or ‘environmental’ profile and these vehicles have indeed attracted a vast amount of investment capital. According to some recent (although probably exaggerated) estimates, the total amount of assets under management with this kind of profile was as much as $2.29 trillion in the US (Social Investment Forum 2006) and €1.03 trillion in Europe (Eurosif 2006) at the end of 2005.
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Notes
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1 For an overview of some of these studies, see UNEP FI and Mercer 2007.
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2 For a critical discussion of other possible interpretations of this idea, see Sandberg 2008.
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3 For a discussion of other possible interpretations of this idea, see Sandberg 2008.
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4 I will in this context not address the issue of whether the kinds of companies that ethical funds normally refrain from investing in (e.g., weapon and tobacco companies) really are harmful in (any of) the sense(s) outlined above. All of the principles discussed here are intentionally a bit vague on the issue of exactly what companies they recommend that investors should refrain from investing in. An in-depth discussion of this issue would simply take us too far from the main subject, which is the plausibility of the principles and the avoidance strategy as such.
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5 Fortunately, little in my arguments below depends on whether negative utility is given extra weight or not. I will in what follows discuss the appeal to consequences without a specific axiological theory (theory about value) in mind – the reader may fill in the one he or she finds most attractive.
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6 It may be noted that Irvine never gives the generalisation principle any more detailed formulation. As it stands, it seems possible to understand it in many, rather different, ways. One possibility, for example, would be to understand it along the lines of rule consequentialism, i.e. the idea that one ought to follow the rules which, if everyone followed similar rules, would yield the best consequences. Another possibility would be to understand it along the lines of Kant’s categorical imperative. For my present purposes however, I believe no more detailed understanding of the generalisation principle is needed.
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7 A similar strategy which an increasing number of ethical funds focus on is that of investing in companies with morally questionable business activities in order to (try to) influence them from within. Either they initiate informal dialogues with managers in order to try to make them change the companies’ ways, or they can use their power to vote at shareholder meetings for similar goals. However, there is little evidence that suggests that the possibilities for individual investors of making a difference are greater with regards to this kind of investment strategy. For further discussion of this strategy, see Sandberg 2008, chapter VI.
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8 For a more detailed discussion of the demandingness of the ethical responsibilities of investors, see Sandberg 2008, chapter VII.
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Sandberg, J. (2012). What are Your Investments Doing Right Now?. In: Vandekerckhove, W., Leys, J., Alm, K., Scholtens, B., Signori, S., Schäfer, H. (eds) Responsible Investment in Times of Turmoil. Issues in Business Ethics, vol 31. Springer, Dordrecht. https://doi.org/10.1007/978-90-481-9319-6_10
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