Fostering pro-environmental behavior with behavioral insights: Experimental evidence from lab and field experiments

Marcel Seifert

Mentor: Katharina Gangl
Advisor: Harald Wilfing
Institution: University of Vienna (Faculty of Life Sciences)
Start: 2021

This dissertation is partly funded by the Jubiläumsfonds of the Oesterreichische Nationalbank, grant number 18609, “Optimally designing financial advice".

Abstract: Fostering sustainable investments that consider environmental, social and governance (ESG) criteria is a main pillar of the EU Sustainable Finance Action Plan and a promising instrument to promote a sustainable economy and future. Yet, investment decisions are individual decisions that might be suboptimal due to incomplete information, insufficient (financial) knowledge and experience or behavioral biases. Thus, individuals often seek assistance from financial advisors. This dissertation seeks to investigate measures in financial advice to increase sustainable investments and barriers to pro-environmental more generally along three strands.

The first strand (already concluded) consists of an online experiment with 2254 participants, consisting of retail investors and a representative sample of the Austrian population showed that information about financial aspects and ESG impact of ESG investments increases the willingness to invest in ESG products. The way in which sustainability preferences of the investors are asked in the financial advisory setting does not have a significant effect on investments. The results of the study have already been published in a working paper (pre-print; journal publication to be followed up).

The second strand (ongoing) concerns the development of a measurement instrument for the assessment of sustainable financial literacy, in cooperation with several experts and institutions (e.g., the Austrian Financial Market Authority, the Umweltbundesamt, the VKI). The instrument has been validated with a sample of 1,047 participants (result published in a policy brief). Currently, an experimental survey is conducted to determine the impact of sustainable financial literacy on stock market participation, sustainable investments, and the ability to identify greenwashing in financial products. Ongoing research along this study entails an online experiment that aims to show how targeted financial education focused on sustainable finance literacy affects investment decisions and the ability to identify greenwashing.

In addition, a third strand entails, among other works, the peer-reviewed publication of the “Klimawandelandkarte”, which is now being finalized jointly with Katharina Gangl and others (preprint available here); and a manuscript (jointly with colleagues) for an online and field experiment exploring barriers to climate-friendly behavior (to be submitted to Ecological Economics in November 2023).