Responsible investment (also known as ethical investment) can be simply defined as the application of ethical principles and values to the investment of capital. It involves investors taking into account environmental, social and governance issues (commonly referred to as ESG). The options for doing this range from excluding businesses that do not meet the investor’s standards and/or investing in the best of particular industry sectors and engaging with businesses to bring about the changes the investor is seeking.
Support Ethical Businesses
Individuals can utilize responsible investment to support those businesses that invest and operate in a responsible manner and to avoid businesses that contravene their principles. By investing in responsible business and avoiding unethical business the responsible investor is able to demonstrate concern about the use of his or her money. Responsible investment involves thinking not merely about financial returns but also about the social and environmental results of investment decisions.
Responsible Investors are Paradigm Pioneers
This image is from Rodger Spiller's PhD dissertation and shows how responsible investors and the businesses in which they invest are paradigm pioneers; adopting a stakeholder perspective and defining success in terms of environmental and social as well as financial performance.
In this section we explore:
- The Origins of Responsible Investment
- The Four P's Model of Responsible Business
- Doing Well and Doing Good
- How Responsible Business Can Do Well
- UN Principles for Responsible Investment
- What Type of Investor Are You?
- Can You Answer YES to The Big Questions?
- Can You Overcome Your Immunity to Change?
- Next Steps