A Puzzle in SRI: The Investor and the Judge

Journal of Business Ethics 84 (2):221 - 235 (2009)
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Abstract

As Socially Responsible Investment (SRI) enters the mainstream of professional and institutional investment practice, some perplexities arise. Some SRI market participants are well schooled in finance but are hesitative as to how to apply non-financial criteria in the management of portfolios. Governments too are giving SRI more attention and, in some countries, are discussion whether and how to regulate the SRI market. Advocacy groups are targeting SRI projects through media campaigns using political discourse. Many of the pertinent questions that come with these perplexities are of the philosophical or ethical type and concern legitimisation, demarcation of responsibilities, interpretation of norms and policy formulation. The inclusion of non-financial criteria into investment decision-making leads to a 'puzzle in SRI' for which this article offers a solution. The puzzle arises when the day-to-day implementation of an SRIpolicy coincides with the process of administering justice. Three questions make up that puzzle: (1) what should an investor do when allegations arise about a corporation, (2) what should an investor do when a corporation is brought before a court, (3) what should an investor do when a corporation is found guilty by a court. This article argues, by distinguishing between the rationality of the investor and that of the judge, that allegations, court cases or court verdicts should not be reasons to disinvest from a corporation. This article offers examples from investor practice and points out in which way allegations, court cases and court verdicts make sense for investor behaviour

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Jos Leys
Ghent University

Citations of this work

Editorial introduction.Wim Vandekerckhove & Jos Leys - 2007 - Philosophica 80 (3):211-212.
Investing and Intentions in Financial Markets.Carl David Mildenberger - 2019 - European Journal of Analytic Philosophy 15 (1):71-94.

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References found in this work

Playing by the rules: ethical criteria at an ethical investment fund.Christopher Cowton - 1999 - Business Ethics, the Environment and Responsibility 8 (1):60-69.
Accounting and financial ethics: From Margin to mainstream?Christopher Cowton - 1999 - Business Ethics, the Environment and Responsibility 8 (2):99–107.
Accounting and financial ethics: from margin to mainstream?Christopher Cowton - 1999 - Business Ethics, the Environment and Responsibility 8 (2):99-107.
How new is socially responsible investment?Robert Taylor - 2000 - Business Ethics, the Environment and Responsibility 9 (3):174–179.

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