Introduction: People, Profit and Planet:

Terms like ethical investment, green investments, socially responsible or sustainable investment have become buzz-words in the financial world. More and more people do not only care for profits, but also for people and the planet. They insist that companies should take care of their employees, neighbors, customers, suppliers and that they do not pollute the environment (more than necessary). Investment funds proliferate that only invest in com-panies managed in a socially responsible way. Many suppliers of these new investment products claim that there is a positive correlation between ethical behavior and financial performance: sustainable investment is more profit-able than ordinary investment. But is this really true? Does this explain the sudden rise in socially responsible investment (SRI)? And if it is really more profitable, – would this not just be another way of profit maximization rather than an expression of social responsibility?

The number of investment funds that apply ethical criteria to select their investment projects has increased very fast in recent years, – as has the over-all volume of investment in such funds. In the United States, about 12 percent of all investment is now screened on the basis of ethical criteria. A closer look reveals, however, that very different selection criteria are applied.