Topic name : Ethical Investment Profitability

Mannion, J. (2004, May 29).

Investment: Where to invest and still have a clear conscience ; doubts over the profitability of ethical investments are quashed by funds’ returns, says jenne mannion:
There is now a wide choice of ethicalfunds available to investors. Among groups offerings equity-based ethical funds are Jupiter, Standard Life Investments, Legal & General, Axa, Henderson, Insight, Old Mutual, Scottish Widows and Halifax. Aegon and Rathbones offer funds investing in ethical corporate bonds. The growth in assets under management and uptake by fund providers shows that ethical investing has come a long way since 1984. However, the biggest stumbling block facing the further expansion of ethical Investment.

McGill, C. (2019, Sep 30)

Ethical investment is making waves: A number of investors are choosing to put their money into more progressive organisations, writes christopher McGill.The Scotsman Retrieved from
W here you bank, where you spend your money, how you invest and even the legacies you leave on your death all have ethical
It may not always be obvious that the choices you make in respect of your finances may, indirectly, fund companies and projects you might not ordinarily wish to support.
The news of late has been awash with stories of retail banks, pension, savings and investmentfunds using their customer’s money to fund fossil fuel developments, destructive mining, and activities that accelerate the destruction of rainforests and wildlife habitats.

Rouw, J. (2001, Sep 04)

Investors could win with an ethical punt INVESTMENT: [late edition].The Age Retrieved
Selected Australian stocks may be pushed up by the weight of money pouring into ethicalinvestment funds, according to a senior actuary.
Addressing the second Annual EthicalInvestment Association conference yesterday in Melbourne, PricewaterhouseCoopers director David Knox also said that certain stocks might now be “undervalued”, appreciating in price as the market improved its understanding of their environmental and social credentials.
Other speakers predicted that the socially responsible investmentsector (SRI) would grow this year, thanks to new laws requiring fund managers to disclose what criteria they used when investing.
Speaking on behalf of the Institute of Actuaries of Australia, Dr Knox said overseas studies had found that companies with good environmental and social practices were generally more profitable, although they were less clear on whether those companies’ share prices clearly beat the broader market over time. Dr Knox presented the preliminary findings of an institute study into the Australian SRI sector, estimated to have $10 billion under management.

AL Ani, M.,Kareem, & Chavali, K. (2023).

The relationship between investment intensity and profitability measures from the perspective of foreign investors.Humanities & Social Sciences Communications, 10(1),
Investmentintensity is the level of investment in fixed assets that affects a company’s long-term growth prospects. In order to make good investment decisions, investors pay more attention to achieving a high level of investment This study examines the impact of two non-GAAP measures of profitability—earnings before interest, tax, depreciation, and amortization and earnings before interest and tax—on investment intensity in Gulf Cooperation Council (GCC) member countries. The study also examines the preference for two non-GAAP measures of profitability from the perspective of foreign investors. The study conducts panel data regressions using 205 firm observations covering the period 2010–2019 to examine the relationship between earnings before interest, tax, depreciation and amortization, earnings before interest and tax, and investment intensity.

MATTHEW KIERNAN AND, A. W. (2004).

UK pension fund trustees and their consultants and money managers have historically looked askance at “socially responsible” investment
Yet there is growing empirical evidence that companies that manage “next generation” investmentrisks – environmental, social and governance – better than their competitors tend to out-perform them financially as well. The launch this week of this year’s report from the Carbon Disclosure Project (CDP) will only add impetus to the debate.
Oddly, however, the overwhelming majority of trustees remains in denial about the investmentconsequences of these increasingly critical risk and performance drivers. There are at least three reasons for this parlous state of affairs.
One is the deep-seated (but erroneous) belief that addressing social and environmental issues almost invariably requires sacrificing risk-adjusted financial returns.
Another is that, since returns are “inevitably” compromised, fiduciary responsibility demands that social and environmental factors be set to one side when investmentdecisions are made.

Hofmann, E., Penz, E., & Kirchler, E. (2009).

The ‘whys’ and ‘hows’ of ethical investment: Understanding an early-stage market through an explorative approach.Journal of Financial Services Marketing, 14(2), 102-117.
Over the last decade, markets for investmentshave changed in Europe. Consumers have become more aware of ethical standards and violations of social values and norms. While in some countries, such as the United States, this change took place decades ago, the market for ethical investment in Europe is still at an early stage. The present study investigates the underlying motives for ethical assets of consumers in early-stage markets. Using seven interviews with financial experts and five focus groups with ethical and conventional investors, we examine how investors view ethical investment, how ethical investors are described in terms of socio-demographics and personality characteristics, and which attitudinal factors are related to ethical investment Interviews and focus groups are recorded and qualitatively analysed according to grounded theory.

Marzuki, A. (2023)

The influence of ESG, SRI, ethical, and impact investing activities on portfolio and financial Performance—Bibliometric Analysis/Mapping and clustering analysis.Journal of Risk and Financial Management, 16(7), 321. This paper aims to examine the publication metrics of literature related to the influential aspects of ESG (environmental, social, and governance), SRI (socially responsible investing), ethical, and impact investing on the portfolio and financial performance literature. It also seeks to identify major patterns and core themes in this topic and draw lessons from the past literature for future directions. Data from the SCOPUS database were used in this study. The ‘biblioshiny’ R package, also known as ‘bibliometrix 3.0’, was employed to conduct bibliometric analysis, utilising mapping and clustering techniques on 260 articles, in order to distil the comprehensive knowledge and identify emerging trends in ESG, SRI, ethical, and impact investing. four categories of themes:

Prokopenko,, I. (2023).

Impact of investments and R&D costs in renewable energy technologies on companies’ profitability indicators:
Assessment and forecast.uncertainty regarding the return on investments is one of the main barriers affecting investors’ decision-making. Based on a vector autoregressive model for analysing the stationary time series, the paper explores the impact of long-term investments and research and development costs in renewable energy technologies on the financial performance of ten of the largest companies operating in this field. The study’s results showed that investments and spending on research and development positively affect such companies’ profitability indicators as earnings before interest, taxes, depreciation and amortisation, earnings before interest and tax, net income, and return on investment. The obtained results can be used to substantiate the economic effectiveness of investments in developing and improving renewable energy technologies when forming the companies’ financial policies to support them.

Greenhalgh, H. (2017). St james’s place joins drive for more ethical investment

St James’s Place has increased the pressure on its fund managers to invest with an eye onenvironmental, social and governanceissues to meet demand from clients for more oversight on how their money is invested for social impact.
The FTSE 100-listed wealth manager said investor interest in ESG issues had “multiplied” in recent years.
“This is partly because there is more being written about it,” said Chris Ralph, chief investmentofficer at SJP. “But it’s also partly because people are observing what’s going on in society and realising that it’s something that they want to think about a bit more.”
Awareness of ESG factors has grown across the industry as investors have asked their advisers and private banks to balance their need to make money with a desire to help others.
Interest in impact investing, which aims to balance profits with social good, has exploded in recent years. The UK market alone is estimated to be worth more than Pounds 1.5bn.

Raphael, M., & Uhl, M. (2023)

Moral luck refers to whether an actor is morally praised or blamed for an action whose outcome they could not influence. In two studies, we investigated the behavioral importance of this phenomenon in the realm of investments, which has become increasingly subject to ethical In our first online experiment, we examined whether people’s moral evaluation of an investmentdecision depended on its arbitrary outcome and whether their interpretation of the nature of the decision was driven by this outcome. Our results showed that profitable investments were considered more moral than unprofitable investments. Moreover, profitable investments were labeled “investments” instead of “speculation” or “gambling” more often than unprofitable ones. In our second study, we asked the subjects to assess investments independent of the outcome. After the outcome was announced, the subjects were given the opportunity to reflect and change their initial decision. The results show that people change the moral evaluation and label of investments when told that it had a bad outcome. This observation was stable across different investment contexts. These findings suggest that we must be careful with the increasing moralization of investment decisions and be sensitive to our cognitive biases.

CONCLUSION

The age Retrieved selected Australian stocks may be pushed up by the weight of money pouring into ethical investment funds , according to a senior actuary . The ‘whys’ and ‘hows’ of ethical investment, Understanding an early-stage market through an explorative approach. Conclusions for the marketing of ethical ivestment funds and for future research are drawn.St james’s place joins drive for more ethical investment .Attitude theory serves to explain ethical investment behaviour . While in some countries ,such as the United States , this change took place decades ago, the market for ethical investment in Europe is still at an early stage.

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