Ethics can be best tested in terms of risk

ethical investing

Risk analysis provides a better assessment of a company's ethical profile than simply gauging corporate earnings

The challenge of reconciling ethical principles with the purely financial requirements of investment remains as real today as it ever has, but with correct risk analysis it is possible to construct an ethical portfolio of corporate bonds that has the potential to provide decent returns. Financial performance remains largely uncorrelated with indicators of ethical integrity, even where there is a long series of data available for interpretation and analysis. Whether this is due to economic rent accruing to those willing to exploit social or environmental vulnerabilities, or to more complex...