Skip to main content
SpringerLink
Log in

Tinkering Toward the Good––Sustainable Investing Between Utopian Imaginaries and Actualizations

  • Original Paper
  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This article seeks to reimagine the relationship between sustainability and financial performance in sustainable investing. Employing a utopian lens, I show how sustainability is constantly negotiated in a process of imagining and actualizing sustainable investing. For this purpose, I explore a fin-tech start-up’s endeavors to democratize sustainable investing through digitalization. Empirically, this article contributes a detailed account of the organizational process of––and the complexities involved in––establishing a sustainable investment organization, to this end focusing on the relationship between sustainability and financial performance. The article further provides a novel theoretical perspective (utopianism) on sustainable investing, one offering a processual approach that uses both external and internal factors in its understanding of the practice. I conclude that a utopian mindset of possibility paves the way for an experimentational attitude and future-oriented thinking. Such a mindset could generate new approaches to the relationship between sustainability and financial performance, thus shining a light on the new and innovative solutions needed to establish financial markets oriented to the common good.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Ahlström, H., & Monciardini, D. (2021). The Regulatory dynamics of sustainable finance: Paradoxical success and limitations of EU reforms. Journal of Business Ethics., 177, 193–212.

    Article  Google Scholar 

  • Alotaibi, K. O., Helliar, C., & Tantisantiwong, N. (2020). Competing logics in the Islamic funds industry: A market logic versus a religious logic. Journal of Business Ethics., 2020, 1–24.

    Google Scholar 

  • Arjaliès, D. L. (2010). A social movement perspective on finance: How socially responsible investment mattered. Journal of Business Ethics, 92(1), 57–78.

    Article  Google Scholar 

  • Bengtsson, E. (2008). A history of Scandinavian socially responsible investing. Journal of Business Ethics, 82(4), 969–983.

    Article  Google Scholar 

  • Bril, H., Kell, G., & Rasche, A. (2020). Sustainable Investing: A Path to a New Horizon. Taylor and Francis

  • Burrell, G., & Dale, K. (2002). Utopiary: Utopias Gardens and Organization. The Sociological Review (Keele), 50(1), 106–127.

    Article  Google Scholar 

  • Child, C. (2015). Mainstreaming and its Discontents: Fair Trade, Socially Responsible Investing, and Industry Trajectories. Journal of Business Ethics, 130(3), 601–618.

    Article  Google Scholar 

  • Cooper, D. (2014). Everyday Utopias. USA: Duke University Press.

    Book  Google Scholar 

  • Denzin, N. K., & Lincoln, Y. S. (2000). The SAGE handbook of qualitative research. USA: SAGE Publications.

    Google Scholar 

  • Dreyer, J. K., Sharma, V., & Smith, W. T. (2020). Warm-Glow Investment and the Under-Performance of Green Stocks. In Financial Management Association Virtual Conference 2020.

  • Eccles, R. G., & Stroehle, J. C. (2018). Exploring social origins in the construction of ESG measures. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3212685

    Article  Google Scholar 

  • Fatemi, A. M., & Fooladi, I. J. (2013). Sustainable finance: A new paradigm. Global Finance Journal, 24(2), 101–113.

    Article  Google Scholar 

  • Ferruz, L., Muñoz, F., & Vargas, M. (2012). Managerial Abilities: Evidence from Religious Mutual Fund Managers. Journal of Business Ethics, 105(4), 503–517.

    Article  Google Scholar 

  • Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance and Investment, 5(4), 210–233.

    Article  Google Scholar 

  • Gold, R. L. (1958). Roles in Sociological Field Observations. Social Forces, 36(3), 217–223.

    Article  Google Scholar 

  • Goudsblom, J. (1977). Sociology in the Balance. Blackwell.

    Google Scholar 

  • Haffar, M., & Searcy, C. (2019). How organizational logics shape trade-off decision-making in sustainability. Long Range Planning, 52(6), 101912.

    Article  Google Scholar 

  • Hahn, T., Figge, F., Pinkse, J., & Preuss, L. (2018). A Paradox perspective on corporate sustainability: descriptive, instrumental, and normative aspects. Journal of Business Ethics, 148(2), 235–248.

    Article  Google Scholar 

  • Hahn, T., Pinkse, J., Preuss, L., & Figge, F. (2015). Tensions in corporate sustainability: Towards an integrative framework. Journal of Business Ethics, 127(2), 297–316.

    Article  Google Scholar 

  • Hartzmark, S. M., & Sussman, A. B. (2019). Do investors value sustainability? A natural experiment examining ranking and fund flows. The Journal of Finance, 74(6), 2789–2837.

    Article  Google Scholar 

  • Hernes, T. (2014). A process theory of organization. Oxford: Oup Oxford.

    Book  Google Scholar 

  • Himick, D., & Audousset-Coulier, S. (2016). Responsible investing of pension assets: Links between framing and practices for evaluation. Journal of Business Ethics, 136(3), 539–556.

    Article  Google Scholar 

  • Hollway, W., & Jefferson, T. (1997). Eliciting narrative through the in-depth interview. Qualitative Inquiry, 3(1), 53–70.

    Article  Google Scholar 

  • Humphrey, J. E., Warren, G. J., & Boon, J. (2016). What is different about socially responsible funds? A holdings-based analysis. Journal of Business Ethics, 138(2), 263–277.

    Article  Google Scholar 

  • Ibikunle, G., & Steffen, T. (2017). European green mutual fund performance: A comparative analysis with their conventional and black peers. Journal of Business Ethics, 145(2), 337–355.

    Article  Google Scholar 

  • Jones, S., Van der Laan, S., Frost, G., & Loftus, J. (2008). The investment performance of socially responsible investment funds in Australia. Journal of Business Ethics, 80(2), 181–203.

    Article  Google Scholar 

  • Kempf, A., & Osthoff, P. (2007). The effect of socially responsible investing on portfolio performance. European Financial Management, 13(5), 908–922.

    Article  Google Scholar 

  • Kok, A. M., de Bakker, F. G. A., & Groenewegen, P. (2019). Sustainability struggles: Conflicting cultures and incompatible logics. Business and Society, 58(8), 1496–1532.

    Article  Google Scholar 

  • Kreander, N., Gray, R. H., Power, D. M., & Sinclair, C. D. (2005). Evaluating the performance of ethical and non-ethical funds: A matched pair analysis. Journal of Business Finance & Accounting, 32(7–8), 1465–1493.

    Article  Google Scholar 

  • van Krieken, R. (2001). Norbert Elias and process sociology. In G. Ritzer & B. Smart (Eds.), The Handbook of Social theory (pp. 353–367). Sage.

    Chapter  Google Scholar 

  • Lagoarde-Segot, T., & Paranque, B. (2018). Finance and sustainability: From ideology to utopia. International Review of Financial Analysis, 55, 80–92.

    Article  Google Scholar 

  • Law, J., & Mol, A. (2002). Local entanglements or utopian moves: An inquiry into train accidents. Sociological Review, 50(S1), 82–105.

    Article  Google Scholar 

  • Levitas, R. (2005). The imaginary reconstitution of society or why sociologists and others should take utopia more seriously. Inaugural Lecture University of Bristol, 1–22.

  • Levitas, R. (2013). Utopia as method: the imaginary reconstitution of society. London: Palgrave Macmillan.

    Book  Google Scholar 

  • Markowitz, L., Cobb, D., & Hedley, M. (2012). Framing ambiguity: Insider/outsiders and the successful legitimation project of the socially responsible mutual fund industry. Organization, 19(1), 3–23.

    Article  Google Scholar 

  • Maxfield, S., & Wang, L. (2020). Does sustainable investing reduce portfolio risk? A Multilevel Analysis. European Financial Management, 27, 959.

    Google Scholar 

  • McCurdy, P., & Uldam, J. (2014). Connecting participant observation positions: toward a reflexive framework for studying social movements. Field Methods, 26(1), 40–55.

    Article  Google Scholar 

  • Nicholls, A. (2010). The institutionalization of social investment: The interplay of investment logics and investor rationalities. Journal of Social Entrepreneurship, 1(1), 70–100.

    Article  Google Scholar 

  • Parker, M. (2002). Utopia and the organizational imagination: Outopia. The Sociological Review, 50(1), 1–8.

    Article  Google Scholar 

  • Pástor, Ľ, Stambaugh, R. F., & Taylor, L. A. (2021). Sustainable investing in equilibrium. Journal of Financial Economics, 142(2), 550–571.

    Article  Google Scholar 

  • Peifer, J. L. (2014). The institutional complexity of religious mutual funds: Appreciating the uniqueness of societal logics. Emerald Group Publishing Limited.

    Google Scholar 

  • Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78–163.

    Google Scholar 

  • Renneboog, L., Ter Horst, J., & Zhang, C. (2008a). Socially responsible investments: Institutional aspects, performance, and investor behavior. Journal of Banking and Finance, 32(9), 1723–1742.

    Article  Google Scholar 

  • Renneboog, L., Ter Horst, J., & Zhang, C. (2008b). The price of ethics and stakeholder governance: The performance of socially responsible mutual funds. Journal of Corporate Finance, 14(3), 302–322.

    Article  Google Scholar 

  • Revelli, C. (2017). Socially responsible investing (SRI): From mainstream to margin? Research in International Business and Finance, 39, 711–717.

    Article  Google Scholar 

  • Risi, D. (2020). Time and business sustainability: socially responsible investing in swiss banks and insurance companies. Business and Society, 59(7), 1410–1440.

    Article  Google Scholar 

  • Ryszawska, B. (2016). Sustainability transition needs sustainable finance. Copernican Journal of Finance & Accounting, 5(1), 185.

    Article  Google Scholar 

  • Schoenmaker, D., & Schramade, W. (2019). Principles of sustainable finance (New produc). Oxford University Press.

    Google Scholar 

  • Scholtens, B. (2006). Finance as a driver of corporate social responsibility. Journal of Business Ethics, 68(1), 19–33.

    Article  Google Scholar 

  • Schueth, S. (2003). Socially responsible investing in the United States. Journal of Business Ethics, 43(3), 189–194.

    Article  Google Scholar 

  • Sparkes, R., & Cowton, C. J. (2004). The maturing of socially responsible investment: A review of the developing link with corporate social responsibility. Journal of Business Ethics, 52(1), 45–57.

    Article  Google Scholar 

  • Van der Byl, C. A., & Slawinski, N. (2015). Embracing tensions in corporate sustainability: A review of research from win-wins and trade-offs to paradoxes and beyond. Organization and Environment, 28(1), 54–79.

    Article  Google Scholar 

  • Yan, S., Ferraro, F., & Almandoz, J. (2019). The rise of socially responsible investment funds: The paradoxical role of the financial logic. Administrative Science Quarterly, 64(2), 466–501.

    Article  Google Scholar 

Download references

Funding

Velux Fonden, 00013146.

Author information

Authors and Affiliations

  1. Department of Communication and Arts, Roskilde University, Roskilde, Denmark

    Sara Dahlman

Authors
  1. Sara Dahlman
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Sara Dahlman.

Ethics declarations

Conflict of interest

I hereby confirm that there are no potential competing interests connected to this article.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendices

Appendix A

Interview Guide––SusPens

List of Topics

  • The interviewees’ personal background, motivation, and way into SusPens

  • The interviewees’ role in SusPens

  • The interviewees’ understanding of SusPens and its product

  • The interviewees’ understanding of sustainability

  • The interviewees’ understanding of SusPens’ technological solutions

  • The interviewees’ understanding of the investment strategy

  • Business professionals only

  • The sustainability scope

  • The relationship between financial performance and sustainability

  • Customer preferences, marketing segment, and branding

  • The organization’s role in society

    • Tech professionals only

  • The technological solutions––front-end and back-end

  • Other options for technological solutions

  • Possible problems or pitfalls with the chosen solution

  • The relationship between the technology and sustainability

  • AI and machine learning

Appendix B

Overview of internal documents

Name

Date

Type of document

Document 1

2016-11-03

Founding application

Document 2

2016-11-17

Project description

Document 3

2016-11-19

Strategy working paper—RoI

Document 4

2016-120-7

Investor deck

Document 5

2017-01-04

Strategy working paper––proof of idea

Document 6

2017-01-13

Strategy working paper––products

Document 7

2017-01-16

One-pager––customers

Document 8

2017-01-18

Strategy working paper––name suggestions

Document 9

2017-03-09

Strategy working paper––IT architecture

Document 10

2017-03-29

Strategy working paper––investment principles

Document 11

2017-04-09

Strategy working paper––calculations

Document 12

2017-04-26

Memo

Document 13

2017-05-02

Founding application––EU H2020

Document 14

2017-05-02

Founding application––EU H2020

Document 15

2017-05-08

Strategy working paper––business plan

Document 16

2017-05-08

Strategy working paper––pitch storyline

Document 17

2017-05-10

Founding application––Discovery Day

Document 18

2017-05-19

Memo

Document 19

2017-06-11

Project description

Document 20

2017-06-13

Project description

Document 21

2017-09-07

Founding application––Climate Kic

Document 22

2017-11-06

Strategy working paper––business model canvas

Document 23

2017-11-06

Strategy working paper––business presentation

Document 24

2017-11-17

Strategy working paper––customer insight

Document 25

2017-11-28

Pitch––eFinancials

Document 26

2018-01-23

Founding application––Innobooster

Document 27

2018-02-26

Meeting notes––data provider

Document 28

2018-03-27

Founding application––SME

Document 29

2018-03-27

Founding application––SME

Document 30

2018-04-05

Founding application––Innobooster

Document 31

2018-04-25

Founding application––EU H2020

Document 32

2018-04-30

Founding application––EU H2020

Document 33

2018-05-18

Investor deck

Document 34

2018-05-29

Meeting notes––advisory meeting

Document 35

2018-05-29

Meeting notes––advisory meeting

Document 36

2018-06-02

Investor deck

Document 37

2018-06-08

Investor deck

Document 38

2018-06-13

Investor deck

Document 39

2018-06-15

Investor deck

Document 40

2018-06-27

Investor deck

Document 41

2018-07-02

Investor deck

Document 42

2018-07-23

Strategy working paper––short-term strategy

Document 43

2018-08-16

Investor deck

Document 44

2018-09-15

Founding application––SME

Document 45

2018-09-15

Founding application––SME

Document 46

2018-10-12

Memo

Document 47

2018-110-6

Founding evaluation––Danish Innovation found

Document 48

2019-01-10

Investor deck

Document 49

2019-01-10

Investor deck

Document 50

2019-01-12

Investor deck

Document 51

2019-01-13

Investor deck

Document 52

2019-01-15

Investor deck

Document 53

2019-01-15

Memo

Rights and permissions

Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dahlman, S. Tinkering Toward the Good––Sustainable Investing Between Utopian Imaginaries and Actualizations. J Bus Ethics 185, 281–297 (2023). https://doi.org/10.1007/s10551-022-05217-8

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-022-05217-8

Keywords

Search

Navigation