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Conflicting Intuitions about Ethical Investment: A Survey among Individual Investors

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  • Sandberg, Joakim

    (University of Gothenburg, Gothenburg, Sweden)

  • Nilsson, Jonas

    (Umeå School of Business at Umeå University, Umeå, Sweden)

Abstract

This present paper relates the results of an exploratory survey distributed among individuals invested in so-called ethical (or socially responsible) mutual funds, and attempts to develop a better understanding of these individuals’ ethical beliefs – especially concerning whether, or why, they think that the practices of contemporary ethical funds indeed are ethical. Survey questions were informed by the contemporary philosophical literature pertaining to the ethics of investing and designed to elicit the respondents’ basic intuitions about the ethics of different investment strategies. Our results indicate that respondents show considerable support for both a moral purity perspective and a moral effectiveness perspective, and they seem to find it difficult to choose between these perspectives. Indeed, we find that this is not just a conflict between different groups of investors with different moral outlooks, but many individuals themselves seem to be struggling with conflicting ethical intuitions. We argue that these results are incompatible with the idea that ethical investors refrain from thinking systematically about ethics simply in order to be able to get away with also investing in non-ethical funds. A more probable explanation is developed building on the contemporary psychological literature concerning intuitions in ethics.

Suggested Citation

  • Sandberg, Joakim & Nilsson, Jonas, 2011. "Conflicting Intuitions about Ethical Investment: A Survey among Individual Investors," Sustainable Investment and Corporate Governance Working Papers 2010/16, Sustainable Investment Research Platform.
    • Handle: RePEc:hhb:sicgwp:2010_016
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    References listed on IDEAS

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    1. Mackenzie, Craig & Lewis, Alan, 1999. "Morals and Markets: The Case of Ethical Investing," Business Ethics Quarterly, Cambridge University Press, vol. 9(3), pages 439-452, July.
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    3. John Tippet & Philomena Leung, 2001. "Defining Ethical Investment and its Demography in Australia," Australian Accounting Review, CPA Australia, vol. 11(25), pages 44-55, November.
    4. Webley, Paul & Lewis, Alan & Mackenzie, Craig, 2001. "Commitment among ethical investors: An experimental approach," Journal of Economic Psychology, Elsevier, vol. 22(1), pages 27-42, February.
    5. Hudson, Richard, 2005. "Ethical Investing: Ethical Investors and Managers," Business Ethics Quarterly, Cambridge University Press, vol. 15(4), pages 641-657, October.
    6. Joakim Sandberg, 2011. "Socially Responsible Investment and Fiduciary Duty: Putting the Freshfields Report into Perspective," Journal of Business Ethics, Springer, vol. 101(1), pages 143-162, June.
    7. Jonas Nilsson, 2008. "Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior," Journal of Business Ethics, Springer, vol. 83(2), pages 307-325, December.
    8. Beal, Diana & Goyen, Michelle, 1998. "'Putting Your Money Where Your Mouth Is' A Profile of Ethical Investors," Financial Services Review, Elsevier, vol. 7(2), pages 129-143.
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    Cited by:

    1. Anett Wins & Bernhard Zwergel, 2016. "Comparing those who do, might and will not invest in sustainable funds: a survey among German retail fund investors," Business Research, Springer;German Academic Association for Business Research, vol. 9(1), pages 51-99, April.
    2. David Risi & Falko Paetzold & Anne Kellers, 2021. "Wealthy Private Investors and Socially Responsible Investing: The Influence of Reference Groups," Sustainability, MDPI, vol. 13(22), pages 1-24, November.
    3. Joakim Sandberg, 2011. "Socially Responsible Investment and Fiduciary Duty: Putting the Freshfields Report into Perspective," Journal of Business Ethics, Springer, vol. 101(1), pages 143-162, June.
    4. Joel Diener & André Habisch, 2022. "Developing an Impact-Focused Typology of Socially Responsible Fund Providers," JRFM, MDPI, vol. 15(7), pages 1-18, July.
    5. Gregor Dorfleitner & Mai Nguyen, 2016. "Which proportion of SR investments is enough? A survey-based approach," Business Research, Springer;German Academic Association for Business Research, vol. 9(1), pages 1-25, April.

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