This paper argues that the virtue of faith is essential in balancing law and business ethics, helping businesses transcend legal compliance to pursue the common good. Drawing on perspectives from Palazzo, Wenger, Taylor, and Žižek, it examines how ethics can move beyond rigid legal frameworks. The paper integrates these views through the classical notion of the virtue of faith, emphasizing its role in guiding both individual and organizational identity. Faith, understood in non-religious terms, acts as a safeguard against the over-legalization of ethics. A practical implication is the importance of open conversations about limitations and shared goals in developing ethical frameworks.

Led by the initial research question "How might humanistic management improve ethics and compliance (E&C) practices?", the research will examine the literature on E&C programs and the insights from the data obtained through the interviews with 20 Spain-based firms' Ethics and Compliance Officers (ECOs) using the lens of humanistic management theory and other related that may arise during the discussion session. The research has the potential to overcome the current barriers that limit employees' full buy-in and, most importantly, their commitment and sense of purpose beyond avoiding punishment and sanctions. The expected outcome is to provide a theoretical framework on how E&C practices can be substantially improved, contributing to responsible business and the common good through a person-centered orientation inspired by the tenets of humanistic management. We expect to contribute to the existing literature on humanistic management and E&C and expand the possibilities for value creation through human flourishing within the organization and society.

Sustainable actions can evoke compensatory beliefs, where individuals perceive that en- gaging inone pro-environmental behavior grants themmoral ” credits” to act less sustainably elsewhere. For example, NayumandThøgersen (2022) found that Norwegian electric vehicle (EV) owners exhibited compensatory beliefs, believing that driving an EV reduced their obligation to engage in other sustainable behaviors, such as limiting air travel or reducing household energy consumption. While this does not necessarily imply a behavioral shift , it underscores psychological mechanisms that may undermine long-term sustainability efforts. Moral balancing theory has been increasingly used to explain such spillover effects, sug- gesting that individuals regulate their moral self-image by alternating between ethical and unethical behaviors. Consequently, an apprehended danger in sustainability and broader business ethics research is that incentivizing sustainable behaviors at societal , corporate, or personal levels may inadvertently trigger kickback effects, where past moral actions jus- tify unsustainable choices. Moral balancing theory provides a framework for understanding these mechanisms. Central to this theory is the interaction between Moral Identity (MI) andMoral Self-Image (MSI) . MI represents the extent to which being moral is integral to a person’s self-concept , whereas MSI captures one’s momentary perception ofmoral standing. Engaging in sustainable behaviors may temporarily increase MSI , reducing the perceived need for additional moral actionsa phenomenon associatedwithmoral licensing. Conversely, reminders of past unsustainable actions may induce a moral deficit , motivating compen- satory prosocial behavior in line with moral cleansing (Nisan & Horenczyk, 1990; Aquino & Reed II , 2002; Jordan, Leliveld, & Tenbrunsel , 2015; Perkins, Podsakoff, &Welsh, 2024) . However, prior research has rarely measured these constructs systematically, leaving open the question ofwhether moral balancing truly drives observed compensatory effects in sus- tainability contexts or if alternative mechanisms play a more significant role (Perkins et al . , 2024) . This study seeks to bridge this gap by explicitly capturing MI andMSI fluctuations inan experimental setting, shedding light onhowmoral self-regulation influences sustainable decision-making. In their recent review, Perkins et al . (2024) highlight the need for novel approaches to examine these intraindividual self-regulation processes. Building on this, my online exper- iment employs a between-subjects design (N=120, target N=180) where participants recall a sustainable, unsustainable, or neutral event . A novel approach is employed to measure MSI : MSI is measured at baseline, post-recall , and post-behavior using a Go/No-Go Associ- ation Task (Nosek & Banaji , 2001) , with charitable donations to an environmental NGO as the dependent variable. Preliminary findings suggest asymmetric evidence only supporting only the moral cleansing effect - recalling sustainability-related actions increased donations, challenging prior self-licensing literature. These results suggest that sustainability policiesmay not induce moral licensing. Instead, highlighting past unsustainable actions could trigger moral cleansing, encouraging ethical behavior. Future research will refine MSI measurement using the Jordan et al . (2015) scale for improved reliability and validity.

The study addresses waste/plastic-pickers in the Philippines.

As the global economy shifts toward low-carbon systems in alignment with the Paris Agreement, the demand for critical minerals necessary for renewable energy technologies is expected to rise significantly (World Bank, 2020). However, mining operations, particularly in regions with weak governance, are often linked to human rights abuses and environmental harm (Mancini & Sala, 2018), creating tensions between different Sustainable Development Goals (SDGs). The concept of a just and fair transition seeks to address these imbalances by promoting equity across the green economy (Buhmann, 2023).

Institutional investors, as key players in financing the green transition, have a critical role in promoting responsible business practices. However, their involvement in transition mineral mining raises the risk of perpetuating harmful activities along the value chain. To mitigate these risks, investors can implement risk-based human rights and environmental due diligence (HREDD) in line with the OECD Guidelines and the UN Guiding Principles on Business and Human Rights (Buhmann, 2021). Notably, financial institutions are not covered by the upcoming EU Corporate Sustainability Due Diligence Directive (CSDDD).

My PhD dissertation, grounded in Business and Human Rights (BHR) literature and informed by sustainable finance and responsible investing frameworks, investigates the role of institutional investors in promoting responsible business conduct. I aim to explore how investors can drive positive change through leverage, capacity building, and stakeholder engagement along the investment chain. This research seeks to map best practices, identify challenges, and propose innovative rights-holder-centric approaches to HREDD that can support a just and equitable energy transition in line with the SDGs.

The core of my research will be a qualitative case study of a Danish pension fund recognized for its responsible investment strategies. This will involve analyzing current HREDD practices, identifying challenges, and exploring strategies that can be generalized to other contexts. Data collection will include literature reviews, company reports, interviews with key stakeholders, and focus group discussions. Additionally, a research stay in Brazil will allow me to conduct fieldwork in mining regions, engaging with local communities and NGOs to assess the experienced risks and needs, as well as the effectiveness of current HREDD practices. By bridging insights from different fields and engaging with practitioners, this research aims to contribute to the advancement of responsible investment strategies and effectively shaping business conduct by studying the application of the normative frameworks presented in the BHR literature.

Currently in the very early stages of scoping this dissertation, I welcome input from other scholars working at the intersection of business and society to refine my research scope, ideas for journal publications, methods, and data collection strategies.

Bibliography:

Buhmann, K. (2021). Institutional Investors and Climate Justice: The Role of Investors in Advancing Prevention of Human Rights Abuse in Investment Chains for Fossil-free Energy. In V. Mauerhofer (Ed.), The Role of Law in Governing Sustainability (pp. 222-236). Routledge. https://doi.org/10.4324/9781003158837-18

Buhmann, K. (2023). Addressing a Human Rights Paradox in the Green Transition: Guidance for Invested Mining Operations to Benefit Local Communities. Journal of Cleaner Production, 419, Article 137903. https://doi.org/10.1016/j.jclepro.2023.137903

Mancini, L., & Sala, S. (2018). Social impact assessment in the mining sector: Review and comparison of indicators frameworks. Resources Policy, 57, 98-111.

World Bank, 2020. Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition. The World Bank, Washington DC.