Get Real! Individuals Prefer More Sustainable Investments

Rob Bauer, Tobias Ruof, Paul Smeets*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Web of Science)

Abstract

The United Nations’ Sustainable Development Goals (SDGs) have created societal and political pressure for pension funds to address sustainable investing. We run two field surveys (n = 1,669, n = 3,186) with a pension fund that grants its members a real vote on its sustainable-investment policy. Two-thirds of participants are willing to expand the fund’s engagement with companies based on selected SDGs, even when they expect engagement to hurt financial performance. Support remains strong after the fund implements the choice. A key reason is participants’ strong social preferences.
Original languageEnglish
Pages (from-to)3976-4043
Number of pages68
JournalReview of Financial Studies
Volume34
Issue number8
DOIs
Publication statusPublished - Aug 2021

JEL classifications

  • g02 - Behavioral Finance: Underlying Principles
  • g11 - "Portfolio Choice; Investment Decisions"
  • g20 - Financial Institutions and Services: General
  • g28 - Financial Institutions and Services: Government Policy and Regulation
  • g23 - "Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors"

Keywords

  • HYPOTHETICAL BIAS
  • SOCIAL PREFERENCES
  • GENDER-DIFFERENCES
  • FIELD EXPERIMENT
  • LOSS AVERSION
  • CHOICE
  • COOPERATION
  • INCENTIVES
  • ECONOMICS
  • ALTRUISM

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