Ethical and social issues in information systems articles Video
Ethical and Social Issues in Information Systems ethical and social issues in information systems articlesHistory[ edit ] Historical decisions of where financial assets would be placed were based on various criteria, financial return being predominant. It was in the s and 60s that the vast pension funds managed by the trades unions recognised the opportunity to affect the wider social environment using their capital assets [4] —in the United States the International Brotherhood of Electrical Workers invested their considerable capital in developing affordable housing projects, whilst the United Mine Workers invested in health facilities. As a response infprmation a growing call for sanctions ethical and social issues in information systems articles the regime, the Reverend Leon Sullivana board member of General Motors in articlse United States, drew up a Code of Conduct in for practising business with South Africa. The conclusions of the reports led to a mass disinvestment by the US from many South African companies.
The resulting pressure applied to the South African regime by its business community added great weight to the growing impetus for the system of apartheid to be abandoned. Towards the end of the century however a contrary theory began to gain ground. In James S. Coleman wrote an article in the American Journal of Sociology titled Social Capital in the Creation of Human Capital, the article challenged the dominance of the concept of 'self-interest' in economics and informattion the concept of social capital into the measurement of value.
Although the concept of selective investment was not a new one, with the demand side of the investment market having a long history of those wishing to control the effects of their investments, what began to develop at article source turn of the 21st century was a response from the supply-side of the equation.
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The investment market began to pick up on the growing need for products geared ethical and social issues in information systems articles what was becoming known as the Responsible Investor. In John Elkingtonco-founder of the business consultancy SustainAbility, published Cannibals ethical and social issues in information systems articles Forks: the Triple Bottom Line of 21st Century Business in which he identified the newly emerging cluster of non financial considerations which should be included in the factors determining a company or equity's value.
He coined the phrase the " triple bottom line ", referring to the financial, environmental and social factors included in the new calculation. At the same time the strict division between the environmental sector and the financial sector began to break down. In the City of London inChris Yates-Smith, a member of the international panel chosen to oversee the technical construction, accreditation and distribution of the Organic Production Standard and founder of one of the City of London's leading branding consultancies, established one of the first environmental finance research groups. The informal group of financial leaders, city lawyers and environmental stewardship NGOs became known as The Virtuous Circle, and its brief was to examine the nature of the correlation between environmental and social standards and financial performance.
Several of the world's big banks and investment houses began to respond to the growing interest in the ESG investment market with the provision of sell-side services; among the first were the Brazilian bank Unibancoand Mike Tyrell's Jupiter Fund in London, which used ESG based research to provide both HSBC and Citicorp with selective investment services in In the early years of the new millennium, the major part of mobster john fogerty investment market still accepted the historical assumption that ethically directed investments were by their nature likely to reduce financial return.
Philanthropy was not known to be a highly profitable business, and Friedman had provided a widely accepted academic basis for the argument that the costs of behaving in an ethically responsible manner would outweigh the benefits. However, the assumptions were beginning to be fundamentally challenged.
In two journalists Robert Levering and Milton Moskowitz had brought out the Fortune Best Companies to Work For, initially a listing in the magazine Fortunethen a book compiling a list of the best-practicing companies in the United States with regard to corporate social responsibility and how their financial performance fared as a result.
Of the three areas of concern that ESG represented, the environmental and social had received most of the public and media attention, not least because of the growing fears concerning climate change. Moskowitz brought the spotlight onto the corporate governance aspect of responsible investment.
His analysis concerned how the companies were managed, what the stockholder relationships were and how the employees were treated. He argued that improving corporate governance procedures did not damage financial performance; on the contrary it maximised productivity, ensured corporate efficiency and led to the sourcing and utilising of superior management talents. In the early s, the success of Moskowitz's list and its impact on companies' ease of recruitment and brand reputation began to challenge the historical assumptions regarding the financial effect of ESG factors. The Freshfields report concluded that not only was it permissible for investment companies to integrate ESG issues into investment analysis, it was arguably part of their fiduciary duty to do so. Both selective investment practices and non-selective could maximise financial performance of an investment portfolio, and the only route likely to damage performance ethical and social issues in information systems articles a middle way of selective investment.
Many in the investment industry believe the development of ESG factors as considerations in investment analysis to be inevitable. There has been uncertainty and debate as to what to call the inclusion of intangible factors relating to the sustainability and ethical impact of investments. Names https://digitales.com.au/blog/wp-content/custom/general-motors-and-the-affecting-factors-of/marx-and-weber-compare-and-contrast.php ranged from the early use of buzz words such as "green" and "eco", to the wide array of possible descriptions for the types of investment analysis—"responsible investment", "socially responsible investment" SRI"ethical", "extra-financial", "long horizon investment" LHI"enhanced business", "corporate health", "non-traditional", and others.
But the predominance of the term ESG has now become fairly widely accepted.
In fact, more than six in ten participants agreed they would be more likely to contribute or increase their contributions to their retirement plan if they knew their investments were doing social good. The report eystems that "Failing to consider all long-term investment value drivers, including ESG issues, is a failure of fiduciary duty".
It also acknowledged that despite significant progress, many investors have yet to fully integrate ESG issues into their investment decision-making processes. Main article: Environmental governance Threat of climate change and the depletion of resources has grown, so investors may choose to factor sustainability issues into their investment choices.
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The issues often represent externalities, such as influences on the functioning and revenues of the company that are not exclusively affected by market mechanisms. Fossil fuel reliant industries are less attractive.
Its conclusions pointed towards the necessity of including considerations of climate change and environmental issues in all financial calculations and that the benefits of early action on climate change would outweigh its costs.]
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