Businesses cannot be trusted to act ethically

ETHICAL

Billion-dollar fines and coherent mistrust suggest business ethics have failed. Neville White, head of socially responsible investment policy and research at Ecclesiastical Investment Management, asks if they can be repaired

The US and a number of developed economies, including the UK, are experiencing a widespread breakdown in business ethics and probity. Just last month, the US giant Citigroup agreed to pay $7bn, including a $4bn civil penalty for the poor quality of its mortgages. The group was allegedly ‘re-packaging’ mortgages into securities and selling them on to investors. The settlement does not absolve the bank, which may still face criminal charges. Poor practices and consumer facing mis-selling have become endemic, with the penalties imposed having little effect in deterring unethical behavio...