Towards a definition of Ethical Investment

Research output: Contribution to conferenceAbstract


An individual may hold strong moral or ethical values which guide how they live their lives. Naturally, they desire to see their values reflected in their investments, which may include pensions as well as directly owned portfolios. Professional advice or commercial investment products may channel them to invest ‘responsibly’ or ‘sustainably’. If the resulting approaches are not ethical, then the underlying investor has not been invested according to their wishes. Many responsible and sustainable investment approaches focus on risk management (BSI 2020, Sullivan 2011). They seek to protect portfolios from loss of value caused by firms’ harmful or unsustainable activities, but not to prevent or reduce those harms.
Such risk management approaches may protect wealth, but an ethical investor would wish to prevent or reduce harms, or support solutions. For example, one may wish to address the root causes of climate change but be invested in a manner that instead protects one’s wealth from the financial consequences of global warming, rather than seeking to prevent (or reduce) it. An investor intending to use their investments to prevent or reduce harms may feel aggrieved, or “greenwashed”, by products that only protect portfolio value from the consequences of those harms. Such products only protect the investor without addressing the underlying moral concerns. The purpose of this study is to offer definitional clarity on ethical investment to guide professional investors, advisers, and individuals on the specific micro-characteristics of a “true” ethical investment, to help ensure they invest as intended. We then explore differences between ‘responsible’ and ‘sustainable’ investment, as typically practised, asking whether they are appropriate approaches providing ethical investment solutions?
Original languageEnglish
Number of pages5
Publication statusPublished - 23 Nov 2021
Event20th ABIS Annual Colloquium 2021: Driving impact through responsible investing - On-line, Brussels, Belgium
Duration: 23 Nov 202123 Nov 2021


Conference20th ABIS Annual Colloquium 2021
Abbreviated titleABIS
Internet address

Bibliographical note



  • Aristotle
  • ESG
  • ethical
  • greenwash
  • investment
  • Markowitz
  • moral
  • optimisation
  • responsible
  • sustainable
  • utility

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Environmental Science(all)


Dive into the research topics of 'Towards a definition of Ethical Investment'. Together they form a unique fingerprint.

Cite this