Ethical funds as a tool for promoting ethics in business

Studies on ethical funds have usually focused on how to establish criteria for choosing stock in which to invest, which are the most commonly used criteria, ethical funds' relative return, the unique features of their management, etc. In contrast, this paper focuses on deeper dimensions of the behaviour of investors and fund managers. First of all, it considers the personal process followed by the investor who is aware of his responsibility and seeks instruments in which to invest his assets that will enable him to achieve a return while, at the same time, fulfilling that responsibility. And, secondly, it looks at the answer offered by the promoters and managers of ethical funds. The paper starts with a brief description of the situation as regards ethical funds in Spain. It continues with a discussion of the investor's moral responsibility based on the traditional theory of responsibility within the framework of co-operation with third party actions, and the difficulties that arise in exercising it. This is followed by an overview of the solutions offered by financial institutions (ethical funds) and the main problems that arise in promoting and managing such funds. The paper closes with some conclusions. (Also available in Spanish - nº 421)