Recent studies show that people are willing to accept a lower return on their investments in case these are socially responsible. This also holds for their pensions. However, it remains unclear whether this acceptance persists when people fully understand the implications of possible lower returns on their retirement income, and the potential need to extend their working years to achieve a certain replacement rate. Moreover, little is known about how sensitive the preferences for more socially responsible investments (SRI’s) in the portfolios of pension funds are, when the tradeoff between private returns and different types of SRI’s are made explicit.

To address this question, this study investigates how the provision of detailed information about SRI returns and their impact on pensions income influences individuals’ willingness to accept lower returns for societal benefits. Moreover, we investigate how these preferences are affected when we change the trade-off between private and societal returns by exogenously changing the characteristics of portfolio shares, expected returns and the variation in these returns.