SRI as Driver for CSR? Ethical Funds, Institutional Investors and the Pursuit of the Common Good

In 1928 Oswald von Nell-Breuning (1928: 10) predicted that, “the stock exchange and its ethical handling are of greatest importance and maybe …of greater timeliness than ever before” (own transl.). One year later the disastrous economic and social consequences of the world economic crisis made it clear that a market economy was not a natural phenomenon but a fragile and artificial product of mankind (Böhm, 1937), and that governmental regulation was needed to ensure the market’s efficiency and the good behavior of the market actors, especially in the financial sector. However, lessons from the 1929 crisis were not well learnt and again, during the recent economic crisis, the handling by financial institutions of their legal and ethical responsibilities became questionable. Due to dangerous speculation, dubious management of customer relations and information, risky investment and lending, and obviously irresponsible dealing with committed capital, financial institutions jeopardized not only the reputation of the whole sector but also the capability of banks for self-limitation and selfregulation (Aβländer, 2005; Aβländer and Roloff, 2004; Thielemann, 2005; Thielemann and Ulrich, 2003). Again, the question arises as to whether government regulations and the existing compliance systems are the most effective means to guarantee the ethical behavior of financial actors.