Super‐sizing Renewable Energy Investment: Examining the Portfolio Preferences of Superannuation Fund Members*

Abstract

We use a discrete choice experiment to quantify whether superannuation fund members value higher allocations of funds to renewable energy investments in their portfolios. Mixed logit modelling provides evidence that this valuation is driven by a fund member's environmental sentiment. Latent class modelling suggests that two classes of superannuation fund members exist: those whose preferences align with a renewable energy transition and those who are focused on financial returns. Our results suggest that the understanding of fiduciary duties, to act in the best interests of members, should be broader than a singular focus on financial returns.*The authors are grateful for insightful comments from two anonymous referees.

Co‐contribution Opportunities for Superannuation Funds and Policy‐Makers

“…Superannuation funds could also try different default investment arrangements as part of pilot programs. There may be scope to use sustainable investment options as a default, given the substantial and growing interest in sustainable investment by superannuation fund members (Hammerle, Crosby and Best 2021). More aggressive default investment options may be useful, especially for financially constrained individuals who may otherwise feel unable to take on more financial risk.…”

Retail Investor Trading Intentions: New Evidence from Australia*

“…Third, the findings complement existing research on the broader financial beliefs of Australians, including research on investor psychology (Clark‐Murphy & Soutar, 2004, 2005), the behaviour of retail investors during COVID (Chiah et al., 2022), financial literacy (Beal & Delpachitra, 2003; Worthington, 2006; Preston & Wright, 2023) and perceptions regarding superannuation and pensions (Worthington, 2008; Peng et al., 2020; Best & Saba, 2021; Hammerle et al., 2021).…”