Climate Fears and the Demand for Green Investment

44 Pages Posted: 27 Nov 2019 Last revised: 14 Jan 2021

See all articles by Anders Anderson

Anders Anderson

Swedish House of Finance

David T. Robinson

Fuqua School of Business, Duke University; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Date Written: November 20, 2019

Abstract

Linking a nationally representative survey to individual pension data, we show how environmental fears, manifesting in extreme beliefs about future climate calamities, are associated with individual portfolio rebalancing decisions. Extreme weather conditions in Sweden in 2014 stoked fears of future environmental calamities, especially in those living closer to the catastrophes. After this heat wave, but not before, investors who fear climate-related catastrophes rebalanced their retirement portfolios towards green investments. This aligns with other behaviors: they also report that they recycle more than their neighbors, think green investments outperform, and are willing to pay higher fees for green mutual funds.

Keywords: Behavioral Finance, Household Finance, Sustainability, ESG, Retirement Savings

JEL Classification: G11, G28

Suggested Citation

Anderson, Anders and Robinson, David T., Climate Fears and the Demand for Green Investment (November 20, 2019). Swedish House of Finance Research Paper No. 19-14, Available at SSRN: https://ssrn.com/abstract=3490730 or http://dx.doi.org/10.2139/ssrn.3490730

Anders Anderson (Contact Author)

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

David T. Robinson

Fuqua School of Business, Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0120
United States
919-660-8023 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

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