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Conflicting Intuitions about Ethical Investment: A Survey among Individual Investors

  • Sandberg, Joakim

    ()

    (University of Gothenburg, Gothenburg, Sweden)

  • Nilsson, Jonas

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

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.

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Paper provided by Sustainable Investment Research Platform in its series Sustainable Investment and Corporate Governance Working Papers with number 2010/16.

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Length: 26 pages
Date of creation: 25 Aug 2011
Date of revision:
Handle: RePEc:hhb:sicgwp:2010_016
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  1. Louche, C. & Lydenberg, Steven, 2006. "Socially responsible investment: differences between Europe and United States," Vlerick Leuven Gent Management School Working Paper Series 2006-22, Vlerick Leuven Gent Management School.
  2. 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.
  3. Anand, Paul & Cowton, Christopher J., 1993. "The ethical investor: Exploring dimensions of investment behaviour," Journal of Economic Psychology, Elsevier, vol. 14(2), pages 377-385, June.
  4. 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.
  5. 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.
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