IDEAS home Printed from https://ideas.repec.org/p/zbw/fsfmwp/234.html
   My bibliography  Save this paper

Retail investors' perspective on ESG investments

Author

Listed:
  • Heidorn, Thomas
  • Watermeyer, Timo
  • Haar, Patrick

Abstract

Retail investors are an essential group in shaping the effects of ESG investing and ESG assets under management are growing at an exponential rate. This study of retail investors' demand generates first evidence on their ESG-relevant decisions. In general, ESG was regarded as a highly interesting topic by retail investors, indicating that its role in financial decisions will further increase in the future. In practice, the portfolio of companies chosen to represent ESG values varies substantially across different funds. We found that, for most retail investors, ESG values have a meaningful relationship with each other. Nevertheless, there is no general agreement on how to fulfil these values. Only few relationships between specific ESG values and measures of achieving ESG values (MAVs) were determined. Moreover, no relationships were found between MAVs and indirect ESG values. Nevertheless, some MAVs had reliable relationships with each other and could be ranked according to controversiality, indicating that MAVs could be clustered for optimal representation of retail investor preference groups. Most retail clients prefer a financially optimal investment, but a meaningful group would accept lower performance to support their values. This confirms additional non-financial utility of investment decisions: Association or dissociation with certain ESG values.

Suggested Citation

  • Heidorn, Thomas & Watermeyer, Timo & Haar, Patrick, 2023. "Retail investors' perspective on ESG investments," Frankfurt School - Working Paper Series 234, Frankfurt School of Finance and Management.
    • Handle: RePEc:zbw:fsfmwp:234
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/278741/1/1860571840.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ESG; ESG funds; retail investors; ESG investment; measures achieving values; ESG survey;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:fsfmwp:234. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/hfbfide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.