Get Real! Individuals Prefer More Sustainable Investments

59 Pages Posted: 21 Nov 2018

See all articles by Rob Bauer

Rob Bauer

Maastricht University

Tobias Ruof

Maastricht University

Paul Smeets

Maastricht University

Date Written: November 19, 2018

Abstract

Do people put their pension savings on the table to promote sustainability? We answer this question in a large-scale field experiment (n = 3,256). The pension fund in our study gave its members a real vote for more or less sustainable investments. A comparison group made the same decision, but hypothetically. We find that 66.7% of the participants favor to invest their pension savings in a sustainable manner. This choice is driven by social preferences. As a result of these strong social preferences we find no difference between the real and hypothetical treatment groups. We rule out financial beliefs, confusion, or a lack of information as explanation. Institutional investors benefit from taking their clients' social preferences seriously, with consequences for asset prices and the fulfillment of the United Nations Sustainable Development Goals.

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

JEL Classification: G02, G20

Suggested Citation

Bauer, Rob and Ruof, Tobias and Smeets, Paul, Get Real! Individuals Prefer More Sustainable Investments (November 19, 2018). 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)

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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