Isabelle Girerd-Potin

Publications (2)0 Total impact

• Source

  Available from: SSRN

  Article: The Philosophical, Ethical and Economic Foundations of Ethical Investment

  Denis Dupre, Isabelle Girerd-Potin
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  ABSTRACT: Ethical awareness is growing and the word itself seems to be spreading to all walks of life. In medicine and economics a myriad of ethical committees have sprouted in an attempt to control the potential excesses of science or business transactions. How can one explain this craze for a word that was hardly ever used ten years ago? It is from an economic perspective that we shall try to explain this new, many-sided phenomenon : sound corporate governance, ethical investment funds, sustainable development, equitable commerce, etc. Our goal is not to prove the efficiency or inefficiency of these types of activities. We do not see things strictly from an American utilitarian perspective that considers ethics as an economic instrument for improving the world we live in. Our research leads to a more ontological view of ethics considering it as an essential element of mankind and of human dignity. The logic behind this desire for ethics could be summarized as follows: The harsh reality of the world requires urgent measures to be taken. The 'theory of justice' makes us believe that each individual is responsible for the life of other people whereas for the supporters of a liberal economy, the productive selfishness of each individual produces riches for the community as a whole. But this could reveal itself to be destructive of wealth in the long term. To survive and expand capitalism will have to be supported by moral education and the preservation of the natural resources. The decision to follow this path is both individual and collective. However, collectively speaking, the nation states no longer act as the locomotive for the social adjustment of capitalism and our deserted churches no longer exert any influence on the consciences of people. The emancipated but solitary individual recognizes that the victims of the collective system are scapegoats. Therefore, recent developments in the changing capitalistic system which is trying nowadays to take into account the altruistic aspirations of the individual offer a pragmatic solution.
  POL: Moral & Ethical Practices (Topic). 02/2004;
• Source

  Available from: Raghid Kassoua

  Article: Adding an Ethical Dimension to Portfolio Management

  Denis Dupre, Isabelle Girerd-Potin, Raghid Kassoua
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  ABSTRACT: Asset management theory and practice is based solely on financial risk and returns. However, over the past few years many investors have started taking into account a new factor, that is, the ethical nature or, more generally, the social responsibility attached t their investments. Socially responsible investment already accounts for one dollar out of eight in the US and it is growing rapidly in France, notably by means of ethical funds. Up to this, financial theory has not shown any preoccupation with ethics in portfolio choice. This is precisely what the authors propose to do covering issues from investor behavior to optimization. Thus, the investor may decide to simply ignore the shares in question and/or apply a social criterion to financial risk and return when optimization was carried out in 173 European firms based on the social scores provided by the French social rating agency "ARESE". Investors should not have any illusions: it is not possible to gain in the long run by being social. Of course, the financial cost the socially responsible investor has to support depends on the relative importance of the social and financial criteria applied but it is possible to obtain improved social performance even at very low financial cost. The financial sacrifice will become all the more real as the investors' ethical appetite grows. But if the majority of investors become responsible, the financial sacrifice will not be in vain: socially aware companies will benefit from a decrease in the cost of their stockholders' equity and an increase in their volume of investment.
  Risk Management eJournal. 06/2003;