We review and synthesize over two decades of research on ethical culture in organizations, examining eighty-nine relevant scholarly works. Our article discusses the conceptualization of ethical culture in a cross-disciplinary space and its critical role in ethical decision-making. With a view to advancing future research, we analyze the antecedents, outcomes, and mediator and moderator roles of ethical culture. To do so, we identify measures and theories used in past studies and make recommendations. We propose, inter alia, the use of validated (...) measures, application of a wider range of theories, adoption of longitudinal studies, and study of group-level data in organizations. We explore research possibilities in new and emergent forms of organizations, ways of organizing work, and technology in ethical decision-making, such as the role of artificial intelligence. We also recommend the study of a broad range of leadership styles and their influence in shaping ethical cultures in organizations. (shrink)

Impact investing urges investors to weigh the social and environmental impacts of their investment decisions. However, in practice, it remains unclear whether investors in financial products are driven by ethical motivations, such as environmental considerations, and what factors influence their trust in the non-financial aspects (e.g., green attributes) of these investments. This study investigates the ethical motivations behind investors’ decisions to invest in green bonds using a machine learning-assisted causal inference framework based on data collected on all green and conventional (...) bonds issued worldwide from 2007 to 2022. It also explores the underlying factors contributing to investors’ trust in green bonds by examining four perspectives: the issuer’s environmental performance, the transparency and governance of environmental disclosure related to bonds, and the financing purpose of the bonds. The results indicate that (1) investors are willing to forgo financial gains for environmental causes, with this sacrifice quantified as an 18 basis points (bps) green premium, demonstrating a clear ethical motivation; (2) the credibility of bond information, financing purposes, and issuer’s greenhouse gas emission intensity directly influence investors’ trust in green bonds, while bond information disclosure and the issuer’s environmental (E) scores have only indirect effects; and (3) companies with weaker environmental performance often adopt proactive disclosure or certification policies to bolster investors’ green trust. This study is the first to explore the factors influencing investors’ trust in green bonds and to analyze the overall causal transmission mechanism among these factors using a causal inference framework. (shrink)

Prior studies on stakeholders’ responses to firms with high prior corporate social responsibility (CSR) engaging in corporate social irresponsibility (CSIR) show inconsistent results. To explore this inconsistency, we focus on the intentionality of CSIR and draw upon cognitive dissonance theory to examine how transgressional CSIR and accidental CSIR differently influence investors’ responses to firms with high prior CSR through both emotional (e.g., anger) and cognitive (e.g., moral judgment) processes. An experimental study using a facial expression analysis technology— FaceReader 5.0 (Study (...) 1) and a scenario experiment (Study 2), reveal that high prior CSR is a double-edged sword. Specifically, high prior CSR elicits an aggravating effect on investor responses (more anger, more negative moral judgment, and more negative effects on investment) in light of transgressional CSIR, but it has a buffering effect on investor responses (less anger, less negative moral judgment, and less negative effects on investment) in light of accidental CSIR. Moreover, we find that when prior CSR and CSIR are in the same (vs. different) domain, the aggravating effect of transgressional CSIR is strengthened, but the buffering effect of accidental CSIR is weakened. Our findings provide important theoretical and practical insights into the effect of prior CSR on investor responses in cases of different CSIR. (shrink)