Talking About the Weather: Availability, Affect and the Demand for Green Investments
41 Pages Posted: 27 Nov 2019 Last revised: 31 Mar 2020
Date Written: November 20, 2019
We survey investors and establish a link between adverse weather events, beliefs about future climate calamities, and portfolio rebalancing decisions. In 2014, a number of extreme weather-related disasters occurred throughout Northern Europe. Exposure to these disasters caused some investors to believe that extreme future climate-related disasters were highly likely, a view far outside the generally accepted scientific consensus at the time. After the disasters, but not before, these investors rebalanced their retirement portfolios to concentrate in mutual funds that tout environmental sustainability. They also report that they recycle more than their neighbors, are willing to pay extra for green products, think green investments outperform, and are willing to pay higher fees for green mutual funds.
Keywords: Availability, ESG, Sustainability, Retirement Savings
JEL Classification: G11, G28
Suggested Citation: Suggested Citation