Doing Well While Feeling Good

31 Pages Posted: 2 Oct 2019 Last revised: 4 Mar 2020

See all articles by Ola Mahmoud

Ola Mahmoud

University of Basel; University of California, Berkeley

Date Written: September 23, 2019


Sustainable finance promotes the doing well while doing good paradigm, that is the idea of simultaneously achieving positive social impact and financial return. This paper posits that the decision to invest sustainably is, in part, driven by impurely altruistic motivations. Two artefactual field experiments with a university's pension fund beneficiaries provide causal evidence that: (i) the warm glow of giving is a primary driver for preferences for sustainable investing; (ii) this effect is largely an intrinsic rather than an extrinsic phenomenon. If people invest sustainably to feel good about themselves, greenwashing efforts can prove highly effective. Implications for market participants and policy makers are thus discussed.

Keywords: sustainable investing, social preferences, impure altruism, warm glow, investor’s high

JEL Classification: G11, G41, D01, D91, Q50

Suggested Citation

Mahmoud, Ola, Doing Well While Feeling Good (September 23, 2019). Available at SSRN: or

Ola Mahmoud (Contact Author)

University of Basel ( email )

Petersplatz 1
Basel, CH-4003

University of California, Berkeley ( email )

Center for Risk Management Research
Evans Hall
Berkeley, CA 94720
United States

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