Socially responsible investing identifies the fiduciary duty and liability for financial advisors serving individual and institutional clients when consulting in the SRI space. This article first discusses the role of a fiduciary emerging from both a legal and an ethical basis. Further, the special aspects of maintaining fiduciary duty and minimizing fiduciary liability are described as they relate to SRI. A number of recommendations are discussed: legal, ethical, and practice. This study argues that prudence focuses more on the process of (...) decisions rather than their outcomes, as measured exclusively by rate of return. (shrink)

Religious organisations are major investors with sometimes substantial investment volumes. An important question for them is how to make investments in, and to earn returns from, companies and activities that are consistent with their religious beliefs or that even support these beliefs. Religious organisations have pioneered responsible investment. Yet little is known about their investment attitudes. This article addresses this gap by studying faith consistent investing. Based on a survey complemented by interviews, we investigate religious organisations’ attitudes towards responsible investment (...) including opinions, practices and the impediments for implementing faith consistent investing. Although our results cannot be generalised because of the non-random character of our sample, six main characteristics of faith consistent investing are drawn: investing is not perceived as being in contradiction with religious values, religious values are important drivers, there is a strong community around faith consistent investing, religious investors are pioneering impact investing, implementing faith consistent investing is not without difficulties, and practices vary across regions. The survey also reveals that faith consistent investing has many commonalities with secular responsible investors. (shrink)

Religious organisations are major investors with sometimes substantial investment volumes. An important question for them is how to make investments in, and to earn returns from, companies and activities that are consistent with their religious beliefs or that even support these beliefs. Religious organisations have pioneered responsible investment. Yet little is known about their investment attitudes. This article addresses this gap by studying faith consistent investing. Based on a survey complemented by interviews, we investigate religious organisations’ attitudes towards responsible investment (...) including opinions, practices and the impediments for implementing faith consistent investing. Although our results cannot be generalised because of the non-random character of our sample, six main characteristics of faith consistent investing are drawn: investing is not perceived as being in contradiction with religious values, religious values are important drivers, there is a strong community around faith consistent investing, religious investors are pioneering impact investing, implementing faith consistent investing is not without difficulties, and practices vary across regions. The survey also reveals that faith consistent investing has many commonalities with secular responsible investors. (shrink)

The aim of this study was to reflect on the origins and meanings of names describing investment practices that integrate a consideration of environmental, social and corporate governance issues in the academic literature. A review of 190 academic papers spanning the period from 1975 to mid-2009 was conducted. This exploratory study evaluated the associations and disassociations of the primary name assigned to this genre of investment with variables grouped into five domains, namely Primary Ethical Position, Investment Strategy, Publication Date, Regions (...) Covered and Periodical Type. The study indicated that papers coded as expressing a deontological ethical position were more frequently associated with the name Ethical Investment , whereas those with an ambiguous ethical position were less frequently associated with Ethical Investment . Three investment strategies (positive screening, best-in-class and cause-based investing) were unusually associated with the primary name Responsible Investment . A strong preference for the name Ethical Investment was noted in the United Kingdom, and contrasted starkly with an apparent aversion for this name in the United States. The name Ethical Investment is significantly more frequently used in journals dealing with ethics, business ethics and philosophy than in finance, economic and investment journals. Finally, the study yielded some weak hints that the name Responsible Investment might perhaps be linked to an egoist ethical position. On the basis of this, and because these have already been substantively linked through the Principles for Responsible Investment in the popular discourse, we follow the heuristic tradition set by Sparkes (Business Ethics Eur Rev 10:194–201, 2001 ), and propose that Responsible Investment be defined as ‘Investment practices that integrate a consideration of ESG issues with the primary purpose of delivering higher-risk-adjusted financial returns’. (shrink)

The concepts of 'ethical' and 'socially responsible' investment (SRI) have become increasingly popular in recent years and funds which offer this kind of investment have attracted many individual inve... merstors. The present book addresses the issue of 'How ought one to invest?' by critically engaging with the ideas of the proponents of this movement about what makes 'ethical' investing ethical. The standard suggestion that ethical investing simply consists in refraining from investing in certain 'morally unacceptable companies' is criticised for being (...) both too rigid (often resting on absolute moral rules which lead to an austere conclusion) and too ineffective for individual investors (investors who after all control only a small part of the investment universe). Furthermore, the idea that ethical investing could consist in engaging more actively with the companies one invests in, in order to make them change their ways and become more socially responsible, is criticised for being just as ineffective for individual investors. Some more radical alternatives are elaborated on and defended - for instance, the suggestion that investors should make as much money from their investments as possible and then donate the proceeds to socially worthwhile charities. From similar suggestions, the common idea that there is no conflict between morality and profitability, or that genuinely ethical investing can be just as profitable as mainstream investing, is criticised for being too naïve. Making a difference may indeed require personal sacrifice of investors, but it is argued that the needs of the possible recipients of philanthropy are morally more important than the luxury of investment returns. (shrink)