James is a relationship manager specialising in providing finance to small businesses. James’s sister Grace, who has a master’s degree in marketing, has just joined one of the new challenger banks. She is actively involved in the launch of a new investment fund aimed at mainstream customers. The fund will be launched to coincide with a major global climate conference in a years’ time. It is aiming to invest in a range of international companies that can justify their claims of following green and sustainable practices in their core activities. The fund will pursue capital growth for its investors to be achieved in an ethical way. Grace is optimistic that a number of high-profile, charitable, non-governmental organisations (NGOs), who are working for climate change will publicly endorse the fund. This support will be dependent on there being no investment in fossil fuels. The fund will also give a preference to companies providing finance and technology in developing nations, as well as those companies who promote social and economic equality. Two months later, Grace enquires whether any of James’ customers might be interested in buying into her fund. She provides a list of names of investors, based all around the world, who want to invest substantial stakes. James notes that alongside the names of some large investors, she has written “high profile and high net worth – possibly waive usual opening account formalities?” A well-connected gentleman based in the Middle East has suggested that there are a number of renewable energy firms, in which he has a stake, that could be included in the investment portfolio. He has already invited Grace out to the Gulf on an all-expenses paid trip to view these factories. On Grace’s return, she described how the factories were heavily dependent on Southeast Asian labour. As a result, she wants to find out more about their terms of employment. James noticed that Grace is currently wearing a stylish heavy, gold bracelet. She mentions that it was given to her as a parting gift. Required: With reference to the above scenario, answer all questions below.
1) With reference to relevant ethical theories, discuss the justification for companies to offer ethical investment opportunities as well as the possible disadvantages of doing so. (35 marks)
2) Evaluate the extent to which Grace is displaying the kind of professional behaviour that you have studied. Outline further steps Grace could take to support her professional development. (30 marks)
3) Analyse the regulation that Grace’s bank and its staff needs to observe in the scenario. In your response, refer to relevant regulatory details, as well as identifying and assessing any legislation that Grace needs to consider to ensure she is protecting herself in addition to her bank.