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Article Review- Ethical investment Process and Outcomes

Grant Grant Michelson, Nick Wailes, Sandra van der Lean, Geoff Frost

The Article titled Ethical Investment Processes and Outcomes was written by Grant Grant Michelson, Nick Wailes, Sandra van der Lean, and Geoff Frost which was published in Journal of Business ethics by Springer. Here this paper presents the general idea about the current issues of the ethical investment and the nexus between the real world practices and corporate behavior. It focuses on the approach that Theres nothing wrong with making money but its how you make the money that counts. The author also portraits the knowledge about the process and outcomes of the ethical investment from the decision made by the socially responsible individuals and institutions. The paper also discuss about whether the individual investors who invest in ethical causes are relatively wealthy or not and able to bear the financial cost in case of slightly lover return than the conventional investors. The author has also been able to integrate the social screening process in the ethical investment process which focuses on the investment portfolios based on a range of social ethics in two aspects that is positive and negative screening. So, it also provides the insight about which investor is more blended towards investing in socially responsible investment through the ethical process, provides better pays or not and does it matter for the future or not. The insight about changing the corporate behavior via the social investment practices in the external environment. It also emphasizes on the two issues ignored by the other literatures having influence on the firms behavior. First one is that it ignores the impact of the operation of the financial market on the value of ethically invested funds and secondly, the problem regarding the showing of returns in the short runs favoring near term earnings and discount future earnings. The concept of Total Social Impact (TSI) has also been incorporated for enhancing the corporate and societal behavior and applied on the assumptions that firm behavior is influenced by the ability to measure its outcomes. But however, the definition for Social Investment is still vague and it doesnt provide adequate research evidence in order to support the idea related to who actually invests in the socially responsible investment. In some cases, it has not been able to correctly report the facts of the particular study. In spite of these minorities, the author has been able to provide fairness to the title of the article as it does provided us with an insight of the ethical investment and the
Prepared By: Ganesh Shrestha, 3rd Sem, SOMTU, MBA FALL 2012 (2nd Batch)

Article Review- Ethical investment Process and Outcomes


Grant Grant Michelson, Nick Wailes, Sandra van der Lean, Geoff Frost

outcomes of the investment. The ideas provided are comprehensive, clear and relevant & it has demonstrated the complexity of many of the issues raised by this topic including the motives of socially responsible investors, the different types of screening processes involved, the mixed evidence concerning the financial return of ethical funds, and the links between ethical investment and corporate behavior. The paper therefore, helped us to generate the ideas related to the ethical investment, its processes, who are the investors etc. Therefore, it can further be taken as a subject of research to make the uncertainty related to ethical investment, crystal clear and to unveil various scopes as well as changes in the scope of ethical investment with the changing periods of time and environment.

Ganesh Shrestha 3rd Sem, SOMTU MBA 2012 FALL (2nd Batch)

Prepared By: Ganesh Shrestha, 3rd Sem, SOMTU, MBA FALL 2012 (2nd Batch)