Sustainable Finance Literacy and the Determinants of Sustainable Investing

Gender-related effects of financial knowledge and confidence on preferences for ethical intermediaries and sustainable investments

“…Several recent studies have provided evidence that retail investors' financial knowledge significantly affects their sustainable and responsible investments decisions. However, the empirical evidence is ambiguous, and although some studies highlight a positive impact of financial knowledge on SRI (Gutsche et al, 2023), others find a negative (Gutsche et al, 2021) or no impact (Filippini et al, 2022), stressing the need for more in-depth analyses. In particular, Phillips and Johnson (2021) show that inadequate financial competencies and lack of knowledge of sustainable financial markets are significant barriers to SRI, in line with the general consideration that higher levels of financial knowledge are associated with more sustainable financial behaviours (Aristei and Gallo, 2021;Chhatwani, 2022;Cucinelli and Soana, 2023b) and higher financial well-IJBM 42,3 being and resilience (Lusardi and Tufano, 2015;Brent and Ward, 2018;Riitsalu and Murakas, 2019;Chhatwani and Mishra, 2021;Bialowolski et al, 2022).…”

“…In this respect, Gutsche and Zwergel (2020) demonstrate that, despite transparency guidelines and sustainability labels, defined by governmental and independent organisations, helping to overcome investment barriers and information costs, a certain degree of basic knowledge of SRI and trust in providers of sustainable financial products are required to make labels work efficiently. Filippini et al (2022) also point out that the lack of a clear definition of sustainable financial products and the non-transparent and complex nature of the related market significantly hinder SRI. Nevertheless, they underline that, in order to make informed investment decisions, individual investors need specific knowledge about sustainable finance that exceeds basic financial competencies.…”

“…, 2023), others find a negative (Gutsche et al. , 2021) or no impact (Filippini et al. , 2022), stressing the need for more in-depth analyses.…”

“…Social preferences, environmental awareness and reputation motives are found to significantly affect individual investment behaviour and to have a higher relevance compared to financial motives (Williams, 2007;Riedl and Smeets, 2017;Bauer and Menrad, 2020). Similarly, individual financial knowledge is found to influence sustainable investment strategies (Gutsche et al, 2023) even if empirical evidence on its effect is still ambiguous (Gutsche et al, 2021;Filippini et al, 2022). On the one hand, higher financial knowledge makes investors more likely to select and understand relevant information in making investment decisions and helps them lowering information costs, encouraging their participation in SRI market (Gutsche et al, 2023).…”

“…, 2023) even if empirical evidence on its effect is still ambiguous (Gutsche et al. , 2021; Filippini et al. , 2022).…”