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Sustainable Investing 101: Defining Ethicality

Ethics is based on the overarching concept of ethicality. As with other active constructs of character, such as behaving with morals, ethicality is the larger concept, just as morality is the larger concept of morals. If an individual chooses to live ethically, they behave in ways that support their ideas of ethicality. 

There are contrasting views on ethics, many of which are debated across religions, cultures, and philosophies. Despite these differences, one universal principle aligns with most, if not all, individuals. This principle is the idea of the golden rule or treating others how you wish to be treated. In other words, it is the commitment not to harm others and to act with consideration and kindness. 

Karma is potentially influential in one’s understanding of ethicality. Because of it, there are debates on whether ethicality is limited by individual motivation or whether it is in our best interest to behave ethically to others. The presence or absence of the belief in karma naturally extends into beliefs about investment. Breaking down what it means to practice sustainable investing requires creating an ethicality definition that makes the most sense to you. Read on to learn more about implementing your definition of ethicality for sustainable investing. 

Ethicality Definition As A Business Practice 

Suppose you are very concerned with the importance of carrying out your ethicality definition at the highest level. In that case, you can piece together an investment portfolio that contains only the most ethical companies. You can even streamline your efforts by working with an ethical financial firm to ensure that your portfolio is as ethical as possible, meaning that all companies listed are the most ethical businesses to consider

Human Impact And Ethics Go Hand-in-hand  

Understanding that the golden rule and sustainability both consider the benefit to the detriment of investment in society and the environment, it is logical to assume that sustainable investing requires an ethical definition that ensures people are treated with kindness and respect. Suppose an investment is profitable but unethical. In that case, your portfolio and investment value are less than and potentially detrimental beyond the immediate effects of the ignored sustainability factors on the world. If you invest in a company that allows you to profit but undermines other values that matter, it’s reasonable to question whether the investment was sound. 

Investors Hold The Power 

Ultimately, with more interest in ethical companies, whether managers change the behavior of their companies to earn ethical investors or companies become more socially responsible by voting power, what is consistent is that the investors have the real power to make positive changes. An ethicality definition, therefore, must include an investor stating what they will and will not stand for.

Aim For Balance 

An ethicality definition that applies to the investing world promotes the least amount of harm to society while allowing investors to profit. A balance of positive human impact and financial benefit can coexist so long as the total human impact is deeply researched for the best outcomes.

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