Abstract

The United Nations’ Sustainable Development Goals (SDGs) have created societal and political pressure for pension funds to address sustainable investing. We run two field surveys (n = 1,669, n = 3,186) with a pension fund that grants its members a real vote on its sustainable-investment policy. Two-thirds of participants are willing to expand the fund’s engagement with companies based on selected SDGs, even when they expect engagement to hurt financial performance. Support remains strong after the fund implements the choice. A key reason is participants’ strong social preferences.

Scientific Portfolio AI- Generated Summary

This paper explores the relationship between sustainable investing and social preferences. The authors conducted a field survey with Dutch pension fund participants to investigate their willingness to invest in companies that align with the United Nations’ Sustainable Development Goals (SDGs), even if it may impact financial performance. The study found that a majority of participants were willing to sacrifice some financial return to invest in companies that align with their social preferences.

The authors also examined the impact of social preferences on investment decisions in a laboratory experiment. They found that participants were more likely to invest in companies that align with their social preferences, even if it meant lower financial returns. The study highlights the importance of considering social preferences when making investment decisions, as it can have a significant impact on investment behavior.

Overall, the research presented in this paper suggests that individuals are increasingly interested in investing in companies that align with the SDGs. This highlights the importance of sustainable investing and the need for pension funds to consider social preferences when making investment decisions. The authors suggest that pension funds can use this information to design investment products that align with the social preferences of their participants.

In conclusion, this paper provides valuable insights into the relationship between sustainable investing and social preferences. The study highlights the importance of considering social preferences when making investment decisions and suggests that individuals are willing to sacrifice some financial return to invest in companies that align with their values. The authors suggest that pension funds can use this information to design investment products that align with the social preferences of their participants, which can have a significant impact on investment behavior.