Do Investors Care about Impact?
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Abstract We assess how investors’ willingness-to-pay (WTP) for sustainable investments responds to the social impact of those investments, using a framed field experiment. While investors have a substantial WTP for sustainable investments, they do not pay significantly more for more impact. This also holds for dedicated impact investors. When investors compare several sustainable investments, their WTP responds to relative, but not to absolute, levels of impact. Regardless of investments’ impact, investors experience positive emotions when choosing sustainable investments. Our findings suggest that the WTP for sustainable investments is primarily driven by an emotional, rather than a calculative, valuation of impact.
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There is strong empirical evidence in the literature that investors have a preference for ESG.
“We find strong empirical evidence in the literature that investors have a preference for ESG”
From A review on ESG investing: Investors' expectations, beliefs and perceptions (2024) · cites this paper as Heeb et al., 2023
There is broad consensus in the literature on the sustainability preferences of investors.
“We find broad consensus in the literature on the sustainability preferences of investors (Bauer et al., 2021;Ceccarelli et al., 2023;Heeb et al., 2023, among others).”
From A review on ESG investing: Investors' expectations, beliefs and perceptions (2024) · cites this paper as Heeb et al., 2023
Stated beliefs may diverge from actual investor allocation decisions.
“Stated beliefs may diverge from actual investor allocations decisions.”
From A review on ESG investing: Investors' expectations, beliefs and perceptions (2024) · cites this paper as Heeb et al., 2023
Investors may claim their investment choices are guided by considerations for sustainability, but their portfolios might not reflect these claims.
“Investors may claim their investment choices are guided by considerations for sustainability, but their portfolios might not reflect these claims (Heeb et al., 2023).”
From A review on ESG investing: Investors' expectations, beliefs and perceptions (2024) · cites this paper as Heeb et al., 2023
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Sorted by citations
Presidential Address: Sustainable Finance and ESG Issues— <i>Value</i> versus <i>Values</i>
STARKS, L. T. (2023) · The Journal of Finance · doi:10.1111/jofi.13255 · Cited by 474 · see citing works
A review on ESG investing: Investors' expectations, beliefs and perceptions
Kräussl, R., Oladiran, T., & Stefanova, D. (2024) · Journal of Economic Surveys · doi:10.1111/joes.12599 · Cited by 175 · see citing works
- Authors
- Heeb, F., Kölbel, J. F., Paetzold, F., & Zeisberger, S.
- Affiliations
- University of Zurich (CH)
- University of St. Gallen , Switzerland and MIT Sloan, USA
- Venue
- The Review of Financial Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2022-09-13
- Volume
- 36
- Issue
- 5
- Pages
- 1737-1787
- ISSN
- 0893-9454 (ISSN-L)
- 1465-7368
- OpenAlex
- W4295419360
- Cited by
- 332
- References
- 8
- Citations by year
- 2026: 71 · 2025: 90 · 2024: 87 · 2023: 55 · 2022: 19 · 2021: 6 · 2020: 4
- FWCI
- 45.96
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Review of Financial Studies (publishedVersion, cc-by-nc)
- Alexandria (UniSG) (University of St.Gallen) (submittedVersion, public-domain)
- RePEc: Research Papers in Economics (submittedVersion)
- Radboud Repository (Radboud University) (submittedVersion)
- Zurich Open Repository and Archive (University of Zurich) (submittedVersion, cc-by-nc)
- Radboud Repository (Radboud University) (submittedVersion, other-oa)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Community Development and Social Impact
- Social Sciences › Economics, Econometrics and Finance › Finance › Sustainable Finance and Green Bonds
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Keywords
- willingness to pay, sustainable investment, social impact, impact investing, investor preferences, framing effects
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