A Behavioral Perspective on Sustainable Finance: Exploratory Research on the Drivers of Sustainable Investing

Margherita Massazza

Studenteropgave: Kandidatafhandlinger


This thesis seeks to investigate the financial and non-financial drivers of sustainable investing. As a starting point, the study proposes that the traditional financial view of investors’ behavior, with its focus on risk-return tradeoff between to explain investment choices, fails to fully explain sustainable investing. Taking a behavioral finance approach, the study acknowledges the role of personal characteristics, socio-cultural factors, and possible irrationalities in driving sustainable investing. Therefore, exploratory research is performed on primary data to identify the drivers of sustainable investing. The analysis unfolds at the experimental and empirical level. At the experimental level, conjoint analysis is applied to the data from a choice survey to identify the relative importance of financial (risk, expected returns) and non-financial (ESG rating, fund objective) attributes for the investment choice. Results from this analysis reveal that non-financial attributes carry a relative importance of 38% in the investment decision. At the empirical level, first factor analysis is applied to data on investor motives to extrapolate overarching drivers of sustainable investing; then, multiple regression analysis tests the relationship between the drivers and the proportion of sustainable assets in investors’ portfolios. Four main drivers are identified - self-expression, financial, social-context, and opportunistic – with the first three displaying a positive and statistically significant relationship with the dependent variable. Thanks to the perspective of behavioral finance and the versatility of exploratory research, this study uncovers the multifaceted drivers behind sustainable investing

UddannelserCand.merc.mib Management of Innovation and Business Development, (Kandidatuddannelse) Afsluttende afhandling
Antal sider83
VejledereKristjan Jespersen