Investment Ethical Decision-Making: Evaluating Company ABC

Mary is a financial analyst at XYZ Investments, a firm that focuses on socially responsible investing (SRI). Recently, she was tasked with evaluating a potential investment in Company ABC, a firm publicly known for its questionable labor practices and environmental standards.

As part of her analysis, Mary discovers that Company ABC has recently made significant improvements in its business practices after facing criticism and pressure from various stakeholders. This includes investing in better labor conditions and implementing environmentally sustainable practices.

Mary is conflicted. On one hand, the improvements in Company ABC's practices align with the ethical standards of socially responsible investing. On the other hand, her firm has traditionally avoided firms with a history of poor ethical practices.

Based on this scenario, discuss how Mary should approach her investment analysis and what ethical considerations she should weigh in making her recommendation to her firm.