Get Real! Individuals Prefer More Sustainable Investments

Do people put their pension savings on the table to promote sustainability? We answer this question in a large-scale field experiment (n = 3,256). The pension fund in our study gave its members a real vote for more or less sustainable investments. A comparison group made the same decision, but hypothetically. We find that 66.7% of the participants favor to invest their pension savings in a sustainable manner. This choice is driven by social preferences. As a result of these strong social preferences we find no difference between the real and hypothetical treatment groups. We rule out financial beliefs, confusion, or a lack of information as explanation. 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.

Update: published in Review of Financial Studies.