Get Real! Individuals Prefer More Sustainable Investments

The Review of Financial Studies, Volume 34, Issue 8, August 2021, Pages 3976–4043

100 Pages Posted: 21 Nov 2018 Last revised: 23 Nov 2021

See all articles by Rob Bauer

Rob Bauer

Maastricht University; European Centre for Corporate Engagement (ECCE)

Tobias Ruof

Maastricht University

Paul Smeets

Maastricht University

Date Written: MARCH 21, 2021

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 and 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 the financial performance. The support remains strong after the fund implemented the choice. A key reason is participants’ strong social preferences.

Keywords: survey experiment, social preferences, socially responsible investments, sustainable finance, experimental finance

JEL Classification: G02, G20, G23, G28

Suggested Citation

Bauer, Rob and Ruof, Tobias and Smeets, Paul, Get Real! Individuals Prefer More Sustainable Investments (MARCH 21, 2021). The Review of Financial Studies, Volume 34, Issue 8, August 2021, Pages 3976–4043, Available at SSRN: https://ssrn.com/abstract=3287430 or http://dx.doi.org/10.2139/ssrn.3287430

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883871 (Phone)

European Centre for Corporate Engagement (ECCE) ( email )

Tongersestraat 53
Maastricht, 6211LM
Netherlands

Tobias Ruof

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Paul Smeets (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands
+31433883643 (Phone)

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