Conflicting Intuitions about Ethical Investment: A Survey among Individual Investors

Joakim Sandberg and Jonas Nilsson
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Jonas Nilsson: Umeå School of Business at Umeå University, Umeå, Sweden

No 2010/16, Sustainable Investment and Corporate Governance Working Papers from Sustainable Investment Research Platform

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.

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Pages: 26 pages
Date: 2011-08-25
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Citations: View citations in EconPapers (5)

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