Will responsible investing create a better world?

SOME years ago, while discussing the topic of responsible investing, a senior official at a venerable Swiss bank proudly told me that one of the bank's early partners had warned his clients in 1841 to avoid exposure to American businesses that relied on slave labour.

The advice was unquestionably prescient - Abraham Lincoln issued the Emancipation Proclamation in 1863, and the 13th Amendment to the United States constitution was ratified in 1865.

Yet it wasn't clear to me if the underlying point of the anecdote was that business leaders should act on their moral convictions, or that they should be capable of recognising unsustainable business practices.