Luxembourg Institute of Socio-Economic Research (LISER)
Maison des Sciences Humaines
11, Porte des Sciences
L-4366 Esch-sur-Alzette / Belval
LISER Conference Room 1st Floor
3E-seminars@liser.lu
Abstract
Climate action is one of the biggest moral imperatives of our time. Carbon divestment is urgently needed to ward off the impending climate emergency. Yet sustainable investments still only account for a modest share of global assets. Findings from the field of moral psychology suggest that the human moral judgement system is not well equipped to process climate change as an important moral problem. Climate change fails to activate an urgency for action in the way that other moral imperatives do. We conduct a randomized controlled experiment with 335 investment professionals to test four strategies that communicators might use to bolster the moral imperative for sustainable investment. We provide evidence that optimistic framing encourages greater responsible investment decisions of sophisticated investment managers. This finding is important because investment professionals have significant influence over the allocation of funds to sustainable investments. We demonstrate that strengthening the moral sentiments of investment experts increases sustainable investment by almost 4 percent. The potential impact of optimistic framing cannot be understated. Assuming a comparable effect size, the increase would represent a $3.6 trillion USD global shift in asset allocations.
--
Supported by the Luxembourg National Research Fund (PRIDE19/14233191).
More about the 3E DTU
The Doctoral Training Unit (DTU) 3E - Experiments, Ethics and Economics - consists of an interdisciplinary consortium of 9 social scientists who use scientific experiments involving human subjects in their research. The objective of the consortium is to create a formal link for collaboration across the three existing social science research laboratories in Luxembourg, with the aim to push forward the state-of-the-art of what we know about human behavior in economic interactions. The DTU 3E gathers members across 5 Luxembourgish research units:
(1) Luxembourg Institute of Socio-Economic Research LISER
(2) Institute for Health and Behavior IHB (Faculty of Humanities FLSHASE, University of Luxembourg UL)
(3) Institute of Cognitive Science and Assessment COSA (FLSHASE, UL)
(4) Luxembourg School of Finance LSF (Faculty of Law, Economics and Finance FDEF, UL)
(5) Luxembourg Centre of Logistics LCL (Economics Research Centre CREA, FDEF, UL)
