7 Socially Responsible Investment SRI and Sustainability

BUSINESS ETHICS
AND SOCIAL
RESPONSIBILITY
UNIT IV:
Business Beyond Profit
Motivation
LESSON 13
Socially Responsible
Investment (SRI) and
Sustainability
Lesson Objectives
• To define socially responsible investment (SRI)
• To explain ethical banking
• To explain Economy of Communion enterprises
• To explain impact investing
What Are Social Enterprises?
These are organizations whose mission is to
bridge social opportunity into sustainable reality
innovatively, effectively, and efficiently.
It has to be noted that there This suggests that firms that
is no incompatibility between act in a socially irresponsible
the economic and social or illegal manner have
motives of sustainable social decreasing shareholder
enterprises: there is more wealth, implying that socially
and more empirical evidence responsible and law abiding
showing a correlation behavior pays off.
between social performance
and financial performance.
On Socially Responsible
Investments (SRIs)
 They have a special role in alleviating poverty,
creating empowerment, and establishing
entitlement at the grassroots level of
socioeconomic development.
 They require easily accessible, low cost, and

amenable funds and technology that can be
sustained in the long-term rather than be
some quick-fix solution.
 The end point of many social enterprises is a
participatory socioeconomic transformation in
which not only the non-competing poor and
needy cooperate with each other, but also
meaningful relations are created between the
resourceful and the needy to enhance
community well-being.
Mission of Ethical Banks
Their very mission is to bridge social opportunity
into sustainable reality innovatively, effectively,
and efficiently, with the specification that ethical
business and values are inherently embedded in
the ideology, principles, standards, and
objectives of the banking organization.
A number
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In ethical
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corporate
cases,
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strategy,
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banks marketing well
arefinancially,
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all undertaken
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students
social
through can be environment.
enterprise
corporate surveyed whether they
social responsibility think which
(CSR), it payscanto
ethical orway
be another not.to add value.
Economy of Communion
 “Unlike the consumer economy based on a
culture of having, (it) is the economy of
giving…”
 It aims to offer a global Christian response to
the pressing problems of poverty and injustice
through challenging the underlying ethos of
business and finance.
 It involves business people, animated by the
Focolare spirituality, setting up a new kind of
enterprise based on Christian ethics.
 While operating within the free market and
abiding by the business regulations and
standards therein, it puts the Focolare vision
into practice. How? By dividing the profits they
make in three parts: one part goes to the poor,
one part for reinvestment in the company, and
a third part for the formation of people
according to this spirit.
 It also tries to apply within the business certain
ethical guidelines, which are mirrored on the
“seven aspects” of spiritual life that underpin
the Focolare’s spirituality.
What Is Impact Investing?
 It is “investing for both financial and social
return.”
 It is “making money while influencing positive
change.”
 It is “earning while serving” or “serving while
earning.”
 It also goes by the names sustainable
investing and environmental, social, and
governance (ESG) investing.
Mission-Related Investing
It is a form of impact investing associated with
foundations and involves seeking out
investments that offer market-like returns and
also provide for social, environmental, or
educational impact, thus allowing foundations to
better align their investments with their stated
missions.
The presence of impact investors like GIIN addresses a major
obstacle to the growth of the impact investing industry,
namely, the lack of transparency and credibility in how funds
define, track, and report on the social and environmental
performance of capital.
Discussion Questions
1. What is a socially responsible investment?
Define briefly.
2. What is ethical banking? Explain briefly.
3. What are faith-based enterprises? What are
Economy of Communion enterprises?
4. What does ESG stand for? Explain briefly
environmental, social, and governance in
ESG.
5. What is impact investing? Explain briefly.
6. How do you describe the concept of financial
inclusion? What is microfinance? Describe the
Grameen Bank of Bangladesh and the CARD
Bank, Inc. of the Philippines.
7. How did the World Commission on
Environment and Development [WCED]
define sustainability?

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BUSINESS ETHICS

 They require easily accessible, low cost, and

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