In the real world of management and economics, conditions of supply and demand determine the market. Entrepreneurs and businesses design their activities to create wealth, increase assets, capitalise on investments and make profitable returns. There is a noticeable strategic desire by humans and organisations to invest in and plan their businesses with an aim to ensure that numbers and higher profits are determinants for the value and progress of their enterprise. Numbers matter they believe and shareholder value is taken as a primary objective of business. Staff of institutions and companies are given clear targets. Tremendous pressure from employers and owners demand the increase of shareholder value and profit maximisation. Ethical questions such as stakeholder orientation are seldom considered as long as the quantitative, and in some cases the qualitative, volume of profits and numbers increase.
At Globethics.net, we promote dialogue and focus on ethics in higher education. One reoccurring theme is what teachers tell their students about integrating ethics in assets/investments management through making business serve the common good of all by infusing numbers with values. The United Nations Agenda in the Sustainable Development Goals presents an attempt by the international community to create a world where “no one is left behind”. This agenda builds on the wisdom of cultures, traditions, human values and on the findings of scholars in disciplines of learning within society.
Socially responsible investing (SRI) or social investment, also known as sustainable, socially conscious, “green” or ethical investing, is an investment strategy that seeks to consider both financial return and social and / or environmental good to bring about a positive change. Many countries are plagued by corruption, government unrest and lax environmental standards, improper financial reporting and even reporting standards. The disadvantages are clear: rising poverty and instability within nations and internationally, a lack of clear direction or goals, climate change, human rights abuses, discrimination based on gender-based discrimination (especially against women and minorities), abuse of power and corporate practices that harm the public.
It is important for practitioners and scholars who teach young people to realise that ethical investing involves any investment strategy in which one may apply one’s values — social, moral, intellectual, religious and cultural — to their management of portfolios and investment strategies. Businesses often follow some guiding principles and would logically need some form of conscience, a ‘moral responsibility’ to operate. This is because investment and asset policies impact human ecology. It is indeed possible to infuse ethical values into the numbers of assets, businesses and investments.
Issues of concern in ethics and in assets and investments are legion in contemporary society. Things are not working properly because there is a disconnection between profits based on numbers and the impact they have on values that serve the common good. Our challenge as ethics providers is to analyse investments using ethical standards. This reflects on how infusing numbers with values can promote the centrality of the human person in the world of economic management.
Although the factors of production include land, labour, capital and entrepreneurs, there is a priority of labour over capital. Some guiding questions, therefore, are useful as principles in training future managers and investors:
- Is there some level of moral responsibility in asset and investment management and even in monetary policy? How would you articulate what this moral responsibility consists of?
- Do asset management or investment portfolios create equity for humans and balance the entire ecology based on environmental, social, cultural and economic criteria?
- Can we rethink the role of capital as an ideology and probably indicate the limits of capitalism?
- Is it possible to think out methods of decentralising the control of the economy by a few and of managing the consequences of that responsibly?
- How can businesses balance the public and private interest?
- Are assets and investments not more about stakeholder recognition beyond the shareholders?
- Does business demonstrate in real terms their social responsibility and their respsonsibility for environmental protection?
- What is a fair trade?
- Where is there respect for the affinity between culture and development?
The Globethics.net Library
provides resources and research materials dealing with how investors and assets managers and their companies can engage in ethical practices, and espouse socially responsible values. The ongoing project of Globethics.net in collaboration with Bread for the World in Berlin, Germany on strengthening “African Church Based Organisations and their Asset Management through Ethical Investment
” (ACAP) is one that seeks to create a more ethical investment environment. It surely benefits people, serves the environment and humanity in general. Let us share these resources and such initiatives to benefit from and build on best practices, to empower and enable those charged with asset and investment management to do so in the best interests of the wider human community and of our environment.
Globethics.net Executive Director