Value matters or values matter? An analysis of heterogeneity in preferences for sustainable investments

Pension fund investments have a substantial influence on sustainability. We analyze preferences for sustainable investment among a representative cross-section of 2486 pension fund
participants in the Netherlands, through a questionnaire survey fielded in the LISS panel. In contrast to standard investment theory, we find that sustainable investments are commonly
favored, even if they harm financial interests. To explain variation among participants’ preferences for sustainable investments, we test socio-demographic factors suggested by dominant
neoclassical investment and behavioral finance theories. Moreover, we add to the existing literature by developing an alternative cultural-theoretical explanation that stresses the role of
value orientations. We estimate linear and generalized ordered logit regression models, and find little support for neoclassical and behavioral finance theories, but substantial support for the importance of value orientations. Given established patterns of value-change, this finding suggests that a further increase in the demand for sustainable investments across developed economies is a likely scenario.

Netspar, Network for Studies on Pensions, Aging and Retirement, is een denktank en kennisnetwerk, gewijd aan het bevorderen van een beter begrip van de economische en sociale gevolgen van pensioenen, vergrijzing en ‘de oude dag’ in Nederland en Europa.

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