Defining ethicality is challenging because it’s a subjective concept. Even within ethical investing, ethicality can be controversial. Creating a system that allows for ethical decision-making without involving opinion is the approach that seasoned, ethical investors utilize to ensure that their ethics are based on the greater good of humankind rather than biased views.

When you think about “ethics,” what comes to mind is morale or the values and beliefs that shape the choices one makes. Everyone holds different beliefs and values, so ethics are often up for debate, whether in politics, family dynamics, etc. Ethical investors want to minimize these debates as much as possible; they use quantification, which allows for decisions on ethical investments to be made in a specific, measurable way.

Definition Of Ethicality Based On Enlightened Self-Interest

  • Ethics can be influenced by motivations that ultimately serve the individual.
  • Enlightened self-interest is the idea that by choosing to behave ethically, people can also help themselves; this is the idea that if you help others, good will come to you in return.
  • Enlightened self-interest operates under “you reap what you sow.” Individuals may choose to behave in ways that benefit humankind, even if they do not believe in the ethics they are honoring.
  • As long as they are making more of a positive influence on humanity, they may also receive benefits themselves, regardless of their true feelings.

Ethics Defined By The Golden Rule

Another definition of ethicality is based on the universal principles under the “golden rule’ application, or the intention to not harm. The intention not to hurt anyone can manifest in the decision to work with for-profit companies that work to help those in need.

Bounded Ethics Defined

Bounded ethics are based on the concept that the ability to make decisions is bounded by the influence of personal beliefs and the eternal values that influence the individual. Motivated reasoning will affect one’s capacity.

How Can Investors Break Through Subjective Terms?

Ethical investors can understand an objective definition of ethicality within the overall value that an investment decision has on humankind. The approach to determining this value is based on identifying company behavior’s costs and benefits. By giving a dollar amount to each benefit and cost, we determine whether investing in a said company is best for humanity.

Learn About Quantification And Make Ethical Decisions

It is impossible to escape from a subjective definition of ethicality 100%. However, by understanding quantification, investors can make ethical decisions using practical approaches that serve humanity rather than individual opinion.


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