ETHICAL INVESTMENT Meaning and
Definition
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Ethical investment, also known as socially responsible investment (SRI) or sustainable investment, refers to the practice of making financial investments in companies or funds that align with one's ethical or moral beliefs and have a positive impact on society and the environment.
An ethical investor aims to invest their money in enterprises that prioritize social and environmental responsibilities, while seeking to generate financial returns. These investments often focus on companies engaged in activities promoting sustainability, renewable energy, fair trade, human rights, or animal welfare. Ethical investors are typically concerned about the societal consequences of their investment choices, ensuring that their financial gains do not come at the expense of unethical practices or harmful industries.
Investors following ethical investment strategies actively evaluate and select investments based on established ethical criteria or guidelines. This process involves examining a company's policies, practices, and its overall contribution to society and the environment. Ethical investors may avoid industries such as tobacco, weapons, fossil fuels, or companies associated with human rights violations.
The growing interest in ethical investment reflects a desire to support businesses that demonstrate responsible behavior and contribute positively to the global community. Proponents argue that ethical investment not only generates financial returns but also stimulates positive change, encourages corporate social responsibility, and fosters a sustainable and equitable future. By considering ethical factors alongside financial considerations, investors can align their values with their investment activities.
Etymology of ETHICAL INVESTMENT
The term "ethical investment" is derived from two main sources: "ethics" and "investment".
1. Ethics:
The word "ethics" comes from the Greek word "ethikos", meaning "relating to character". It evolves from the Greek philosopher Aristotle's work on moral philosophy known as "Ethics". Ethics is a branch of philosophy that deals with questions of good and bad, right and wrong, morality, and principles guiding human behavior.
2. Investment:
The term "investment" originates from the Latin word "investire", which means "to clothe" or "to put on". It was initially used in a more general sense and referred to the act of putting resources, time, or effort into something with the expectation of a positive return or benefit.
When combined, "ethical investment" refers to the act of putting financial resources into endeavors or enterprises that align with one's ethical or moral beliefs.
