Work

Climate Information in Retail Investors’ Decision-Making: Evidence From a Choice Experiment

Year: 2018

Type: article

Abstract: Financial markets play a decisive role in the transition to a low-carbon economy. This study investigates the role of climate information presentation for climate-friendly investing among retail investors. We conduct a choice experiment in which we vary the presentation format of climate information by means of three label designs to test their influence on investment practices. We provide empirical evidence for the effectiveness of climate labeling as a potential nudge for climate-friendly investing. Furthermore, we find heterogeneity in the influence of climate information across different label designs and cognitive characteristics of investors. Intuitive (reflective) decision makers tend to place significantly more (less) weight on funds’ climate performance compared with financial performance—irrespective of a participant’s environmental preference.

Source: Organization & Environment

DOI: 10.1177/1086026618771669

Authors: Alexander Bassen, Katrin Gödker, Florian Lüdeke-Freund, Josua Oll

Institutions: Universität Hamburg, University of Reading, ESCP Business School

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: green

Funder: EIT Climate-KIC