There is an expectation that businesses should operate ethically. But first, we must define ethical finance before we can demand its implementation. As a seemingly abstract concept, ethical finance concerns how business activity is undertaken.
In ethical finance, profit is not the sole driver of transactions. In the world of ethical finance, actions have consequences, and the way profits are realized matters. Ethical concerns span a broad spectrum of focal points, primarily driven by topical interest areas in our cultural zeitgeist.
The way companies operate, conduct transactions, and treat people matters. We cannot ignore the impact of business activity on its stakeholders or the environment. Actions have consequences. Broadly speaking, we can cite social components, environmental concerns, and general governance as the immediate focal points.
Sticking solely to a loose definition of morality naturally lends to an ambiguous definition of ethical finance. A robust societal framework is required to govern expected conduct. This template should factor in a fundamental human appreciation component to frame ethics as having a heart and soul.
It is incumbent on us to paint the accepted ethical framework with broad strokes. Everyone in a decision-making role should be fully committed to ethical finance. Often, communication breakdowns result from a lack of awareness or uncertain expectations.
The continuously evolving finance sector regularly introduces new standards, tactics, and strategies to advance ethical conduct. When implemented correctly, ethical finance results in improved reputations, improved cash flow, and compliance with societal norms and expectations.
Case Study: Ethical Finance Where It Matters – Homeownership
Homeownership is a privilege, not a right. Ethically, we can argue that every individual should own their own home. Unfortunately, such bold assertions naturally spill over into ideological complexity. As a society, we have provisions, constructs, and frameworks in place to facilitate homeownership.
Ethically, that’s the right thing to do. It is disheartening that many may not qualify for homeownership because they are unable to make mortgage payments. Nonetheless, there is a specific segment of the population where ethical finance has been introduced and is succeeding on a grand scale.
One sector of our demographic – veterans – is privy to a VA home purchase agreement from veterans’ lenders. Thanks to partial government funding of veterans’ mortgages, it’s entirely possible for society to show appreciation to veterans for their service ethically. This is perhaps the clearest example of ethical finance in action. Veterans receive exclusive, preferential treatment by VA loan providers to ensure a clear pathway to homeownership.
The ethical constructs are rooted in our gratitude for their service. Society appreciates all the sacrifices they have made to protect the homeland and secure our way of life. The result is a tailored, structured loan program designed exclusively for veterans, service personnel, and eligible family members.
Why is Homeownership an Ethical Matter?
Every individual deserves to be treated with respect. That’s the right way for society to behave. Homeownership is the most significant safeguard against the challenges of the outside world, particularly the cruel elements. Home is where the heart is. It is the bedrock upon which we build all of our dreams, hopes, and aspirations.
It is a springboard for future success, and a bulwark against the insanity of the world. One could extrapolate further by stating that a home embodies ethics in society. We sanctify our homes, respect our homes, appreciate our homes, and take refuge in our homes.
Veterans understand more than others that freedom is not free. Somebody, somewhere, had to sacrifice to preserve and maintain our freedoms. From an ethical standpoint, mortgage brokers catering to veterans are providing a societal good.
Granted, government backing makes it easier to issue loans to eligible veterans, with competitively priced interest rates. Equally important is the fact that a VA loan does not require a down payment. Far too many regular folks are hamstrung by the requirement to put money down on a property that they will be paying off for up to 30 years. The zero-down requirement fast-tracks the pathway to homeownership for vets.
Viewed in perspective, it’s clear that ethics are either a deliberate driver of the process or a welcome offshoot of a well-run program. Either way, it’s a win-win for veterans and their homeownership aspirations.
