Financial or environmental-impact information promote ESG investments: Evidence from a large incentivized online-experiment

Effective stimulation of investments in Environmental, Social, and Governance (ESG) requires reliable knowledge of motives that drive investors’ decisions. We investigate how information on financial return and environmental impact as well as the combination of both affect the decision to invest sustainably. Moreover, we test whether offering a general or granular choice on sustainability preferences affects investment decisions. An incentivized online experiment with experienced retail investors and a representative sample of the Austrian population (N = 2254) shows that information on financial impact as well as on environmental impact stimulates sustainable investments. However, the combination of both types of information yields no additional positive effect. Information has no strong effect on investor satisfaction. Also, the difference in choice options on sustainability preferences has no large impact on investment decisions or satisfaction. An explorative analysis suggests that women and investors holding high biospheric values as well as investors with high financial literacy, and trust in ESG products are more likely to invest sustainably. Additional results on the revision and stability of investment decisions are discussed.