Comparing those who do, might and will not invest in sustainable funds: a survey among German retail fund investors

Abstract

In this paper, we present the results of an online questionnaire among private German mutual fund investors. In an exploratory nature, we empirically analyze the differences between three groups: sustainable investors, conventional investors that are either generally interested or those that are not interested at all to invest in socially responsible (SR) funds. We provide evidence on motives and attitudes of these three investor groups, showing that SR fund investors are quite similar to those interested in investing sustainably and very different from those who only consider investing conventionally. All three groups agree that sustainable actions of a company affect its stock price positively. Yet, they all believe that SR funds perform worse than conventional funds. Nevertheless, some still invest in SR funds. Consequently, different motives and attitudes are the determining factors when it comes to making an investment decision. These differences will be extensively discussed on the following pages.

Why don't we see more action? A metasynthesis of the investor impediments to integrate environmental, social, and governance factors

“…Finally, the deep‐seated perception that a company's ESG performance is detrimental to financial performance poses a major impediment for institutional and private investors (Eccles & Kastrapeli, ; Paetzold & Busch, ; Wins & Zwergel, ). In addition to isolated investor experience of underperformance in more short‐term time frames and theme stocks, decades of dogma in education and business concerning the necessary distinction of shareholder and stakeholder interests could be one of the main explanations (Smith & Rönnegard, ; West, ).…”

Altruism and egoism in investment decisions

“…We argue that the relation between altruistic values and behavior also holds for investment decisions. Socially responsible investors have higher donations to charity as well as higher social preferences (Jansson & Biel, ; Nilsson, ; Riedl & Smeets, ; Wiesel et al ., ; Wins & Zwergel, ). We argue that these investors will be intrinsically motivated (Andreoni, ; Beal, Goyen, & Philips, ) and engage in SRI because of their altruistic values.…”

“…Second, our work relates to the literature that uses surveys and experiments to analyze why people are socially responsible investors. Several studies provide evidence that prosocial attitudes and behavior are positively related to self‐reported SRI holdings (Gutsche, Köbrich León, & Ziegler, ; Nilsson, ; Wins & Zwergel, ). In line with this evidence, Riedl and Smeets () find that social preferences are positively related to holdings in SRI mutual funds.…”

“…BRODBACK et Al. Riedl and Smeets (2017), Wiesel, Myrseth, and Scholtens (2016) and Wins and Zwergel (2016) show that social preferences affect the decision to invest responsibly. Døskeland and Pedersen (2016) and Glac (2009) however conclude that pecuniary motives are the main determinant for the decision to invest responsibly.…”

Socially responsible investment: An analysis of the structure of preferences of savers

“…Another new feature of this research is the application of this technique to a medium‐term savings product: savings deposits. In the literature on SRI, there are studies focused on the purchasing of investment funds (Barreda‐Tarrazona, Matallín‐Sáez, & Balaguer‐Franch, ; Lewis & Mackenzie, ; Nilsson, ; Nilsson, ; Nilsson, Nordvall, & Isberg, ; Sandberg & Nilsson, ; Tippet, ; Wins & Zwergel, ) and the purchase of shares (Beal & Goyen, ; Clark‐Murphy & Soutar, ; Consolandi, Innocenti, & Vercelli, ; Nakai, Honda, Nishino, & Takeuchi, ). However, no studies using this approach and focussing on savings deposits have been found, despite this being one of the most popular financial products in the Spanish market (Bank of Spain, ; Valor et al, ).…”