Ethical Finance:Evolution of a Lexical and Definitional Construct

Ethical or Socially Responsible Investment is a complex and ever-evolving concept. Despite the growth of ethical finance through these years, there has been no one universally accepted definition of the concept. This paper traces the evolution of the terminology and definition of the concept over the years, to appreciate what it meant in the past and its evolution into what it means today; based on a thorough insight into the literature. The paper finds that ethical finance evolved from purely religious concerns to social concerns in the 1960s and 70s. Growth of literature on the subject in the 80s broad-based the concept and alternative terms like Socially Responsible Investing evolved. In the 1990s and early 2000s, it further expanded to encompass environmental and governance issues, and developed into ESG investment. This transition has led to expansion of the concept and development of alternative terms and definitions, and this trend is likely to continue in future as newer definitions may evolve. But, in the present day context, the definition evolved comprehensively captures the dimensions of the concept most important to society.