Topic 8: Ethics and sustainability Flashcards
Affinity savings account
Account that’s linked to a charity or good cause. The provider makes a cash payment from its own funds to this charity/cause based on the average balances held in the affinity group accounts. The more supports save in their chosen scheme, the bigger the cash payment the charity will receive
Bankruptcy
A situation where a person can’t pay their debts as is subject to a court order that shares out their assets between their creditors
Corporate Social Responsibility (CSR)
Any action/project where a company goes beyond the interests of its shareholders and senior management in order to benefit other stakeholder groups, with either a social or environmental purpose (normally), also known as citizenship or sustainable, responsible business
Economic sustainability
Concerned with reducing the undesirable consequences of economic activity by maintaining consumption on a sustainable scale
Environmental sustainability
Concerned with reducing the negative human impact on the earth’s ecosystems
Ethical investment
An investment made in a company that takes into account the wider impact of its activities on society and the environment
Ethical investment Association (EIA)
An organisation that brings together and gives support to financial advisors who want to promote green (environmentally friendly) and ethical investment
Ethics
The moral principles that govern a person’s behaviour or the conducting of an activity. It’s important in the financial sector because money and finance depend on trust.
Financial Conduct Authority (FCA)
One of the 2 main regulators of financial services in the UK (the other one is the PRA)
Islamic banking
Banking based on the principle that a person shouldn’t enjoy an increase in wealth from allowing someone else to use their money unless the first person is prepared to expose their wealth to the risk of loss
Malpractice
Breaking professional rules to gain an advantage, usually at the expense of a customer
Precipice bond
An investment with a maturity of 3-5 years that offers high income but no protection against the loss of capital invested.
Principles for Responsible Investment (PRI)
An initiative that comes under the United Nations Environmental Programme. It’s a set of aspirational and voluntary guidelines for investment firms that want to address social and environmental/corporate governance issues
Social sustainsainability
Concerned with creating communities that foster well-being, peace, security and justice for the people who live in them.
Treating customers fairly (TCF)
An FCA initiative that requires providers to put the well-being of customers at the heart of their approach to business, known as the fair treatment of customers
