Ethical Investing: Ethical Investors and Managers

Business Ethics Quarterly 15 (4):641-657 (2005)
“Ethical investing” is interpreted in the following paper to be the use of non-financial normative criteria by investors in the choice ofsecurities for their portfolios.Ethical investors may aim at fulfilling duties they feel they have, possibly including increasing the amount of good in society through theconsequences of their buying and selling behavior. The main duties are those of not-profiting from bad corporate behavior and of punishing bad (or rewarding good) firms. The main consequence desired is that managers manage corporations in a more ethical manner. But ethical investors (as opposed to some other kinds of investors who are also interested in normative issues) also aim at receiving returns based on the market risk of their investments.If the aim of managers is to maximize shareholder wealth, then ethical investors can fulfill their duties or achieve their desired consequences only if their trading activities affect shareholder wealth, i.e., share price. A theoretical argument is presented to show that this trading activity will not affect share price or return. In addition, reference is made to results of empirical studies which show that ethical stocks yield market returns, i.e., that the share price of ethical firms is unaffected by the actions of ethical investors.If the trading activity of ethical investors fails to affect share price and return, then these investors fail to fulfill any of their goals or to achieve their ends
Keywords Applied Philosophy  Business and Professional Ethics  Social Science
Categories (categorize this paper)
ISBN(s) 1052-150X
DOI 10.5840/beq200515445
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
Download options
PhilPapers Archive

Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 24,392
External links
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library
References found in this work BETA

No references found.

Add more references

Citations of this work BETA

Add more citations

Similar books and articles
Joakim Sandberg (2007). Should I Invest with My Conscience? Business Ethics: A European Review 16 (1):71–86.
Alan Lewis (1999). Morals and Markets. Business Ethics Quarterly 9 (3):439-452.
Mark S. Schwartz (2003). The "Ethics" of Ethical Investing. Journal of Business Ethics 43 (3):195 - 213.

Monthly downloads

Added to index


Total downloads

19 ( #243,424 of 1,924,687 )

Recent downloads (6 months)

6 ( #140,609 of 1,924,687 )

How can I increase my downloads?

My notes
Sign in to use this feature

Start a new thread
There  are no threads in this forum
Nothing in this forum yet.