What is it about?
Following categorical and hypothetical imperatives and reciprocity as a norm, we hypothesize how institutional investors’ commit to SRI through a divestment strategy against ethically reprehensible behaviour of banks, especially when these investors represent banks themselves.
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Why is it important?
Bank’s moral commitment to SRI via divestments is influenced more by cultural and reciprocity norms than their moral commitment to participate in the PRI.
Perspectives
Researchers have found that this part of a bank’s business is conditioned by other parts of the business with the intention of improving their relationships with lending (Massa and Rehman 2008) or IPO (Hao and Yan 2012) clients at the expense of financial performance. In our case, this negative result could also imply investment decisions that are not aligned with their clients’ objectives and ethical preferences.
Dr Maretno Agus Harjoto
Graziadio Business School - Pepperdine University
Read the Original
This page is a summary of: Ethics and Banking: Do Banks Divest Their Kind?, Journal of Business Ethics, July 2023, Springer Science + Business Media,
DOI: 10.1007/s10551-023-05476-z.
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