In this episode of Season 2 of: 'CNBC-TV18 & Cyril Amarchand Mangaldas Present The Thought League', experts discussed the strength of ethical capital.

To deep dive into this thought leadership discussion, CNBC-TV18’s Nisha Poddar spoke to Dr Simon Longstaff, Executive Director, The Ethics Centre & Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas.

Longstaff said, “One of the things that investors in particular are interested in, and also other stakeholders - is the degree to which you can actually predict the conduct of a corporation. And to do that you need to know the degree to which there is alignment between what it says and stands for, and also the extent to which it accords with the expectations of society. You take those two things together and the level of alignment amounts to ethical capital. The basis on which you can make judgments about the reliability of what a company says and what it will actually do and it has a huge impact in on risk adjusted returns.”

Shroff said, “I think this conversation about ethical capital is way larger than just sustainability. I think it is a far more deep-rooted philosophy on the basis of which private enterprise or any sort of enterprise could be founded. An ethical capital in my belief is as old as capital itself.”

He added, “In today's times, which are so volatile, there is so much money floating around, there are huge temptations because of greed, this concept is more important than ever before. So, I completely resonate with Simon's observations that we need to look at the market and look at enterprises and businesses through the lens of their performance on ethical capital and it is hard to find an index that kind of measures it, but you will know it when you see it.”

For full interview, watch accompanying video...

(Edited by : Aditi Gautam)

First Published:Nov 17, 2021 10:21 PM IST