Get Real! Individuals Prefer More Sustainable Investments

Abstract

Do people put their pension savings on the table to promote sustainability? We conducted a field experiment with a pension fund that gave its members a real vote for more or less sustainable investments. We find that 67.9% of the participants favor to invest their pension savings in a sustainable manner. Even among participants who expect lower financial returns on sustainable investments, a majority votes for more sustainable investments in their pension plan. 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