Schwartz, Mark. "The 'Ethics' of Ethical Investing." Journal of Business Ethics, March 2003.

This non-quantitative study by an ethicist critiques the ethics of "the ethical investment movement." Key points:

1) "By calling their product 'ethical,' these firms presumably cause investors to place a higher degree of trust in the ethical mutual fund firms' ethical behavior. As a result, investors become more vulnerable or susceptible to abuse, creating additional moral obligations on the part of ethical mutual fund firms."

2) That the industry may not be meeting its ethical obligations because social screening criteria for some funds is vague, and because it is possible that the industry's advertising may be construed as misleading to investors ("ethical concerns have been raised over the use of playing on customers' fears and emotions to drive decision-making)".

3) Some of the screens used by social investors are "ethically justified," but gambling (cites poll data showing only 17% of the American public think gambling is unacceptable) and military (citing the vision statement of the U.S. Army) perhaps are not. "The [military] product does not necessarily lead to physical harm, and can potentially be ethically justified."

4) The industry needs to be more accountable in its application of social screens. The author notes that Business Ethics magazine has been a leader in reviewing the transparency of different funds.