Sustainable Investing and Political Behavior

76 Pages Posted: 22 Jun 2023 Last revised: 18 Mar 2024

See all articles by Florian Heeb

Florian Heeb

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Julian F Kölbel

University of St. Gallen - School of Finance; MIT Sloan; Swiss Finance Institute

Stefano Ramelli

University of St. Gallen - School of Finance; Swiss Finance Institute

Anna Vasileva

University of Zurich - Department of Finance

Date Written: June 19, 2023

Abstract

A major concern regarding sustainable investing is that it may crowd out political support for government interventions targeting negative externalities. We test the validity of this concern in a preregistered experiment shortly before a real referendum on a climate law with a representative sample of the Swiss population (N = 2,051). We find that the opportunity to invest in a climate conscious fund does not erode individuals’ support for climate regulation. Our experimental results are consistent with actual voting and investing behavior across Switzerland. We conclude that the spillover effects of sustainable investing on individual political behavior are limited.

Keywords: Behavioral Finance, Climate Change, ESG, Externalities, Sustainable Finance, Political Economy, Voting Behavior

JEL Classification: D14, H42, G18, P16

Suggested Citation

Heeb, Florian and Kölbel, Julian and Ramelli, Stefano and Vasileva, Anna, Sustainable Investing and Political Behavior (June 19, 2023). Swiss Finance Institute Research Paper No. 23-46, Available at SSRN: https://ssrn.com/abstract=4484166 or http://dx.doi.org/10.2139/ssrn.4484166

Florian Heeb

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Julian Kölbel (Contact Author)

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St. Gallen, 9000
Switzerland

MIT Sloan ( email )

100 Main Street
Cambridge, MA 02142
United States

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Stefano Ramelli

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St. Gallen, 9000
Switzerland

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Anna Vasileva

University of Zurich - Department of Finance ( email )

Plattenstr 32
Zurich, 8032
Switzerland

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