Ciaran Hughes QFA
Improve corporate behaviour
Updated: Jan 31, 2021
Author note: Ciarán Hughes is a financial advisor at Ethico and an expert in ethical and sustainable investing solutions with 10 years+ experience in financial services.
B.A. Accounting and Finance (NUIM)
Qualified Financial Advisor (LIA)
Responsible Investment Advisor (PRI academy)
Professional profile LinkedIn
Consumer driven change can incentivise socially positive corporate behaviour
Behaviour change comes about through incentives. If a company is solely motivated by profit and increasing shareholder value, then it could be natural to cut corners on the environment or to stick to outdated management structures.
Only 6.4% of C.E.O's in Fortune 500 companies are female.
Historically, corporate behaviour on environmental, social issues, and human rights have been widely shaped by meeting the minimum requirements by law. Diversity can lose out significantly to the status quo. It could be argued that their is a large social "tax" being paid by society to accommodate this traditional corporate behaviour simply to benefit shareholders.
Be the change
Pension money invested in ethical funds is generally out of reach for companies with negative social outcomes. As ethical funds take up a larger percentages of the overall investment market, it will become more difficult for companies that do not ethically qualify to raise money. They will be forced to improve their behaviour or struggle to raise capital. Over time, this fosters a culture of socially positive behaviour in tandem to profit seeking, and the concept of ethical corporate behaviour becomes the norm.
Ethical Investment funds are taking up an ever bigger slice of the over all market. Institutional investors and retail investors (like you) are moving more money to ethical funds everyday. Be part of that change.