Ethicality is a complex subject, as everyone has their own ethical viewpoints on various issues. However, there are some overlapping principles that most, if not all people can agree on, such as “The Golden Rule,” which is to do no harm. When we consider ethical investing through the lens of The Golden Rule, we see that it provides the guiding framework behind making sound moral choices regarding which companies to reject and which to work with.
Sustainable investing is influenced by the viewpoints of the investor(s) involved, but it is predominantly shaped by the costs and benefits associated with a company’s behavior. Not only are benefits and consequences compared to one another, but they are also considered numerically by quantifying the positive contributions to the harms a company’s behaviors create for society. Generally, companies that prioritize humankind over profit are considered ethical, and those that do not are rejected.
Although you can’t quantify the value of a human life, measuring factors of company impact gives investors an objective framework to view the appropriateness of their investment options. Indeed, if you want to get started in ethical investing, working with a seasoned firm familiar with quantification can provide you with insight to help guide your investment decisions. As you familiarize yourself with defining ethicality, add the following information to your investor toolbox.
Defining Ethicality: Look At The Big Picture
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Everyone is influenced by motivated reasoning. When our values or belief systems hinder our ability to make the best choices for ethical reasons, we experience bounded ethicality. As you grow your investment portfolio, remember to look at the big picture of a company’s actions on humanity, society, and the environment.
You Benefit From Ethical Investing Too
Even though you must be mindful of your investment choices, you still benefit from carefully defining ethicality for all your investments. In fact, when you behave ethically, you put yourself in a position to be helped in return. When a company creates a positive human impact, you profit without causing unnecessary harm. The concept of a win-win in ethical investing is part of defining ethicality, as it backs the theory of self-interest or the idea that you get back what you give.
What To Look For In Genuinely Ethical, For-Profit Companies
It is easy to fall into all-or-nothing thinking. You might believe that if a company is for-profit, it puts money-making strategies first. With ethical companies, money is a priority, but defining ethicality through monetary gain is not the goal of ethical investing. An ethical company will not carry out actions that cause significant harm to make money. Only when money-making opportunities showcase a positive impact and minor damage will genuine for-profit companies take action.
Keep These Ethical Essentials In Mind
If you can see that a company is making an effort to help others and is making business choices that impact everyone positively, you’re seeing a company that is defining ethicality in action. Keep the above essentials in mind as you navigate the ethical investing world.