Motives to engage in sustainable investment: a comparison between institutional and private investors

Abstract

The current study compares motives to invest in accordance with socially responsible criteria among different groups of investors. In total, 60 employees from 19 investment institutions, 453 private investors and 71 institutional investors participated in a questionnaire study. While socially responsible investment (SRI) among private and institutional investors was guided by self-transcendent values (environmental and social values), this was not the case among fund managers working in investment institutions. Fund managers in investment institutions were affected by beliefs about long‐term returns of SRI. Private investors were, in addition, influenced by beliefs about long‐term returns, whereas institutional investors were motivated by an effort to reduce financial risks. Finally, investment institutions tended to overrate the importance of financial returns among their beneficiaries (private and institutional beneficiaries) and underestimate the importance of ethical, environmental and social aspects for beneficiaries. The results indicate that private and institutional investors/beneficiaries give a wider interpretation of fiduciary duty than investment institutions do. Copyright (C) 2011 John Wiley & Sons, Ltd and ERP Environment.beliefs , ethical investments , investment decisions , socially responsible investment , values ,

Which proportion of SR investments is enough? A survey-based approach

“…Nilsson (2008) concludes that the subjective perception of financial return and risk are the core decision-making determinants in any investment choice. This is also supported by Jansson and Biel (2011b) who suggest that private investors are influenced by beliefs concerning returns in the long run. Furthermore, Jansson and Biel (2011a) report that conventional and ethical investors have similar beliefs about the financial performance of SR investments which perform worse in the short term but slightly better than conventional investments in the long run.…”

Investors’ reactions to companies’ stakeholder management: the crucial role of assumed costs and perceived sustainability

“…By focusing on (potential) investors' reactions, our paper therefore contributes to developing a more inclusive stakeholder theory. Second, by outlining the importance of assumed costs and perceived sustainability as critical moderating mechanisms, it reconciles opposing theoretical perspectives (Jansson and Biel 2011;Rivoli 1995) with regard to (potential) investors' preference for companies that prioritize either shareholding or non-shareholding stakeholders. Third, this paper enhances our current understanding of the specific factors that predict investors' judgment of stakeholder management activities (Aguinis and Glavas 2012;Hillenbrand et al 2013), thereby contributing to our knowledge about individual investment behavior (Schijven and Hitt 2012).…”

“…From a wealth maximization perspective (Friedman 1970;Rivoli 1995), (potential) investors may reduce their investments in response to management's prioritization of non-shareholding stakeholders due to the costs associated with it (Ogden and Watson 1999). In contrast, and in line with a sustainability perspective (Jansson and Biel 2011), (potential) investors may increase their investments in response to companies' prioritization of non-shareholding stakeholders because such prioritization is expected to sustainably increase a company's future success.…”

“…Based on theoretical considerations (Crane et al 2015;Jansson and Biel 2011;Rivoli 1995), we postulate that two factors should play an important role in this relationship. First, the assumed costs for fulfilling non-shareholding stakeholders' interests should impact potential investors, as these costs affect shareholders' immediate returns (Stevens et al 2015).…”

“…First, the assumed costs for fulfilling non-shareholding stakeholders' interests should impact potential investors, as these costs affect shareholders' immediate returns (Stevens et al 2015). Second, the perceived sustainability of fulfilling stakeholders' interests for companies' future success should also influence investors' reactions, as sustainability affects shareholders' wealth maximization in the long run (Jansson and Biel 2011;Wärneryd 2001).…”