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Social Responsibility, Consequentialism and Public Policy

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  • Moisson, Paul-Henri

Abstract

The paper investigates socially responsible investment (SRI) when savers’ moral compass is direct consequentialism. It unveils the determinants of the (positive) green premium under laissez-faire and studies the ability of Pigouvian taxes to deliver the first-best outcome. It characterizes conditions under which, despite leakage, divestment increases social welfare. It describes when best-in-class strategies dominate exclusion. It further demonstrates that, whenever a polluting technology may be cleaned, shareholder activism in the polluting sector may be the morally right action. The paper then conducts the same analysis with two other moral criteria: "shared responsibility" and rule consequentialism, and compares their implications to the ones of direct consequentialism.

Suggested Citation

  • Moisson, Paul-Henri, 2024. "Social Responsibility, Consequentialism and Public Policy," TSE Working Papers 24-1521, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:124697
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    References listed on IDEAS

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    More about this item

    Keywords

    socially responsible investment; consequentialism; impact investing; green premium; Pigou tax; divestment; shareholder activism;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other

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