What is ethicality- The Answer Isn’t So Simple When It Comes To Investing

Ethicality is concerned with holding up standards of moral and ethical beliefs and behavior. There are various frameworks for ethical living, many of which are rooted in religion. Other takes on ethicality include humanistic perspectives that may vary significantly in thought and application.

While people hold different ethical viewpoints, they are mostly linked by an underlying concept: not to harm others. Dubbed “the golden rule,” we’ve seen how the ethics of treating others with mutual respect greatly benefit society and the world. You can apply ethics to almost any situation, as there are factors to consider from the social, environmental, economic, and global spheres.

Given that we all hold different values, ethicality is a conflicting concept. What makes ethi cality significant is the motivation behind how one views and interprets a situation. If you are motivated by specific values over others, you will naturally gravitate toward ethical viewpoints that support your values. From the lens of investing, we ask, “what is ethicality?” and explain why ethicality isn’t so simple for investors. 

How Personal Motivation Influences Ethical Viewpoint

• Personal motivation begs the question, “what is ethicality?” based on your values. Your motivation for healthy living, for instance, may be grounded in family values. You may believe spending time with your loved ones is more important than making money. On the other hand, if you value financial freedom, you may work long hours and spend less time with your family.

• Motivational reasoning affects investors. Specifically, it leaves investors wondering, “what is ethicality?” from the scope of their work. These internal conflicts are essential to overcome in order to work as an ethical investor.

What Is Ethicality?

Ethical differences are not necessarily problematic on their own. Within ethical investing, however, conflicting views can interfere with business decision-making. Since the golden rule interlinks ethics, ethi cal investors utilize this principle to reduce conflict.

So, what is ethicality?

Ethicality Means Doing No Harm By Measuring Human Impact

• Not only is ethi cality grounded in the golden rule, but it is simplified through quantification.

• In this way, ethical investors can consider the human impact of their investment choices by comparing the degree of human benefit to human harm that a company is contributing.

• By adding and comparing dollar amounts to the examples of human suffering and human benefit for each company, ethical investors can ask themselves, “what is ethicality?” and make socially responsible investment decisions.

Why Ethical Rigidity Is Essential

Ethicality must be rigidly defined in ethical investing to consider the influence of investment on humanity. Ethical investors can build effective portfolios by listing investments that contribute the most benefit and the least harm. By staying firm on these terms, when investors ask, “what is ethicality,” the answer is preserved, so that motivated reasoning is not influential.

Ethical Investing Means Choosing To Benefit The World

Defining ethicality is complex for investing. By sticking to the golden rule and quantification, ethical investors avoid disputes over ethics and maintain a formal system of ethical investing that benefits the world.