Joakim Sandberg

Moral economy and normative ethics

‘Moral economy’ has become a popular concept in empirical research in disciplines such as history, anthropology, sociology and political science. This research utilizes normative concepts and has obvious normative implications and relevance. However, there has been little to no dialogue between this research and philosophers working on normative ethics. The present article seeks to remedy this situation by highlighting fertile points of dialogue between descriptive and normative ethicists. The proposition is that empirical researchers can become more precise and stringent in their descriptions of moral attitudes and traditions with a greater understanding of normative ethics; and, at the same time, philosophers have much to gain from a closer examination of the realities of moral thinking and social action. The concurrent examination of both strands of research may be especially rewarding.

What are Your Investments Doing Right Now

In the present times of financial crisis and economic turmoil, many people are worried about their investments. A rather straightforward and understandable worry concerns what will happen to the particular investments one currently holds, or those held before the onset of the turmoil, and whether there will be anything left of these once the crisis is over. A more strategic worry, however, is how to invest so to avoid the kind of ethical problems in the future (e.g., the taking of unreasonable financial risks) which generally are thought to, at least partly, have given rise to the crisis. One possibility some investors may be looking at here is the kind of investing which is the topic of this book – so-called ‘ethical’, ‘responsible’ or ‘socially responsible’ investment (SRI). Over the last decade or so, an increasing number of banks and fund companies have launched investment vehicles with an explicit ‘ethical’, ‘social’ or ‘environmental’ profile and these vehicles have indeed attracted a vast amount of investment capital. According to some recent (although probably exaggerated) estimates, the total amount of assets under management with this kind of profile was as much as

Corporate Ethics, Reputation Management

2.29 trillion in the US (Social Investment Forum 2006) and €1.03 trillion in Europe (Eurosif 2006) at the end of 2005.

Toward a Theory of Sustainable Finance

Reputation management refers to all the practices employed by corporations aimed at improving the public perception of the corporation. This article outlines the main features of some of the most common points of discussion pertaining to the ethics of reputation management. It introduces the debate on classical forms of corporate communication, or ‘spin-doctoring,’ but also some issues related to more contemporary forms of ‘corporate social responsibility’ management. Finally, it introduces the involvement by stakeholder activists in the battle over corporate reputations and some of the discussion this has given rise to.

Uncertain times, plural rationalities and the pension fiduciary

There is currently a growing consensus that the financial system falls short of fulfilling its social purpose. This not only poses a practical challenge for the world leaders but also poses a theoretical challenge for contemporary research: to rethink the role of financial markets in society. According to the dominant view of finance, rooted in neoclassical economic theorizing, financial agents should always adopt the practices which maximize the value of the firm. This chapter draws out the reasoning behind this view, which in part consists in an idea of a “division of moral labor”: social responsibility should be a task for the social services and civil society, whereas the financial system should focus only on raising and maintaining capital. Clarifying this reasoning draws out some flaws of the dominant view, for example, the inherent conflicts between private and public interests and the lack of attention to all-encompassing challenges such as climate change . To address these flaws, a new theory is proposed for a more sustainable role of finance in society. The theory represents an attempt to strike a balance between opposing camps in contemporary business ethics research. Moreover, the chapter discusses implications of the new theory for both public policies and the governance of financial institutions.

The heterogeneity of socially responsible investment

Modern portfolio theory is no longer quite the safe harbor for fiduciaries making investment decisions that it once was (Hawley et al. 2011). One reason for this is the prolonged uncertainty in the financial markets that was mentioned by chairman Bernanke in 2010 and which still seems to be with us two years (at the time of writing) down the line. In such an environment, the pension fiduciary faces both the external pressures stemming from a prolonged uncertain investment outlook, and the internal pressures stemming from employers and participants reacting to economic uncertainty and voicing their concerns related to the investment of pension assets. Fiduciaries have a duty to balance the interests of their different participant groups, and understanding the perspectives of those beneficiaries is critical to successful implementation of fiduciary obligations (Hawley et al. 2011; Berry and Scanlan 2014). From a practical perspective, unrecognized stakeholder expectations can pose risks to follow-through on implementation of investment strategies. How should the pension fiduciary act when the expected correlations among asset classes fail to materialize? How should the pension fiduciary interpret the apparently mixed signals from plan sponsors whose reactions to the sudden exposure to significant unfunded liabilities range all the way from derisking (by shifting more plan assets into fixed income investments) to seeking higher expected returns (by increasing the plans exposure to hedge funds and private equities)? What is the framework for making asset allocation decisions in such an environment?