ESG & sustainability in financial investment decisions

Abstract

Presently, there is a strong global movement supporting sustainable governmental, business, and personal efforts. However, there remains a lag in the adoption of environmentally conscious practices in financial markets, despite the fact that several investigations and meta-studies have shown that green financial assets out-perform traditional counterparts and many firms consider sustainability and ESG to be value-adding strategies.This study explores this lag in consumer adoption by investigating perception, relevant heuristics, and behaviour regarding green financial investments. To achieve this, a survey was distributed using a between-subjects methodology collecting data on subjects’ willingness to invest, expected performance and perceived risk of green financial assets, in this thesis represented by Green Funds based on a sustainability index, in contrast with a more traditional financial asset: a performance-based index fund. Data was also collected on demographics and environmental values.Out of 166 valid responses, it was found that overall consumers are significantly more willing to invest in traditional funds, considering them to provide better performance and lower risk. The two most notable factors affecting attitude towards green investments were a) overall value of the environment and commitment to sustainability and b) age.These findings have relevance to private companies, investing platforms, and fund managers seeking to optimize their engagement strategies and to environmental interest groups seeking to influence consumer behaviour and increase the adoption of sustainable investing behaviour. This also provides value to sustainability literature and academia as scholars continue to explore the attitude towards and adoption of sustainable practices by the public.

Date of Award	6 Jul 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Yan Vieites (Supervisor) & Larissa Elmor (Co-Supervisor)