Ecological Citizenship and Ethical Investment

There has been very little debate about the practical forms that ecological citizenship might take. Ethical investment, which seeks to influence companies to adopt responsible policies that benefit society and the environment, has grown rapidly in recent years, particularly in the UK. Dobson has identified four defining characteristics that are used in this article to assess whether ethical investment is an example of ecological citizenship. The evidence demonstrates that individual ethical investors are engaged in an activity that displays all the characteristics of ecological citizenship. However, the case for regarding institutional investors as ecological citizens is weak, although citizenship arguments have the potential to strengthen the case for corporate social responsibility. Notes Although Dobson (Citation2003) distinguishes between environmental and ecological citizenship, the terms are used interchangeably in this study. This article uses the term 'ethical investment' as it is still widely known in the UK. However, SRI is gaining wider international currency; indeed, some definitions of SRI incorporate ethical investment as one, narrow, form of passive investment (for example, CIS, 2003). In interviews Lewis (Citation2002) found that ethical investors display different attitudes to different types of money. Where money has been inherited and is located in 'ordinary' investments, it tends to be left untouched, but when money has been self-earned it is more likely to be invested ethically. He also found a strong motive to bequeath to one's family. In short, he found that 'moral and financial compromises are commonplace where individuals are neither maximising their financial return nor their ethics' (CitationLewis, 2002: 89–90). By arguing that individual ethical investment is a form of ecological citizenship, this article is not offering a judgement about whether or not an individual ethical investor is an 'ecological citizen', for such a claim would depend on a much wider assessment of their attitudes, behaviour and lifestyle. It is worth noting that the manifestation of this non-contractual relationship between the individual ethical investor and strangers near and far takes the form of a financial contract between the individual investor and the fund manager. Although CitationKelly (2001: 137–141) argues that the concept of fiduciary duty has generally been interpreted as serving 'shareholder' interests rather than the interests of the corporation. These might include not just workers, but the community and, implicitly, the wider environment. She argues that there is no legal reason (at least in the USA) why such a broader interpretation should not be developed. On a practical note, institutional investors certainly cannot act as ecological citizens when they lack expertise or training in CSR matters. An Ethical Investment Research Service (EIRIS) survey of the top 250 UK occupational pension funds (by capital value) found that while three quarters of the responding fund managers funds said they engaged with firms on social, environmental and ethical issues, only half had training on how to incorporate these into investment strategies. The Environmental Data Services (Citation2003b) quotes the Director of Investor Responsibility of Insight Investment as claiming that few fund managers have sufficient understanding of the issues and that many only consider them in the short term, for example where regulation, litigation or reputation are involved. Over a quarter of the sample can be regarded as 'real' ethical investors who were prepared to take some financial loss. The fact that more than 10% said they would be prepared to lose more than £200 on investments of £5,000 over five years is described as demonstrating a 'moral pull' towards ethical investment.