Socially Responsible Investors: Exploring Motivations and Ethical Intensity

Differences in investor motivations have been largely neglected as a topic in the literature on socially responsible investment. Most research studies consider all investors as a homogeneous group. This chapter aims to contribute to the strand of literature that focuses on dissimilarities. Particular attention is given to motivations that drive individual investors toward socially responsible investment. Motivations, in fact, may influence the financial instruments chosen, the strategy adopted, the amount of money invested, and the level and direction of the trade-off between the two main sources of utility for ethical investors, which are ethics and profit. Furthermore, the concept of “ethical intensity” is introduced to achieve a better understanding of investors’ willingness and effective choice with regard to the ethical investment process. The suggested components of “ethical intensity” are (a) “proximity,” that is, the closeness of an investment’s ethical criteria to an investor’s ethical set of values or moral justification; (b) “social efficacy,” such as the perceived ability to encourage social change; (c) “centrality,” that is, the “position” of the investor in the process; and (d) the temporal immediacy (“urgency”).