Looking beyond ESG preferences: The role of sustainable finance literacy in sustainable investing

  • We assess how sustainable finance literacy affects people’s sustainable investment behavior, using a pre-registered experiment. We find that an increase in sustainable finance literacy leads to a 4 to 5% increase in the probability of investing sustainably. This effect is moderated by sustainability preferences. In the absence of moderate sustainability preferences, any additional increase in sustainable finance literacy is at minimum irrelevant, and we find some evidence that it might even reduce sustainable investments. Our findings underscore the role of knowledge in shaping sustainable investment decisions, highlighting the importance of factors beyond sustainability preferences.

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Author:Alix AuzepyORCiD, Christina E. BannierORCiDGND, Florian GärtnerORCiDGND
URN:urn:nbn:de:hebis:30:3-812988
URL:https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4773211
DOI:https://doi.org/10.2139/ssrn.4773211
Series (Serial Number):CFS working paper series (No. 719)
Publisher:Center for Financial Studies
Place of publication:Frankfurt, M.
Document Type:Working Paper
Language:English
Year of Completion:2024
Year of first Publication:2024
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2024/04/16
Tag:MIFID; SFDR; Sustainable finance literacy; behavioral finance; sustainable investments
Edition:March 11, 2024
Page Number:99
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:G Financial Economics / G1 General Financial Markets / G11 Portfolio Choice; Investment Decisions
G Financial Economics / G1 General Financial Markets / G18 Government Policy and Regulation
G Financial Economics / G5 G5 / G53 G53
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht