Is Sustainable Finance a Dangerous Placebo?

Florian Heeb, Julian F Kölbel, Stefano Ramelli and Anna Vasileva
Additional contact information
Florian Heeb: MIT Sloan
Julian F Kölbel: University of St. Gallen; MIT Sloan; and Swiss Finance Institute
Stefano Ramelli: University of St. Gallen; and Swiss Finance Institute
Anna Vasileva: University of Zurich

No 23-46, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: A first-order concern regarding sustainable finance is that it may crowd out individual support for more effective, policy-driven approaches to address societal challenges. We test the validity of this concern in a pre-registered experiment in the context of a real referendum on a climate law with a representative sample of the Swiss population (N=2,051). We find that the opportunity to invest in a climate-conscious fund does not erode individuals’ support for climate regulation. While sustainable finance resembles a placebo in the sense that participants seem to overestimate its impact, it is not a dangerous placebo that crowds out political engagement.

Keywords: Behavioral Finance; Climate Change; ESG; Externalities; Sustainable Finance; Political Economy; Voting Behavior (search for similar items in EconPapers)
JEL-codes: D14 G18 H42 P16 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2023-06
New Economics Papers: this item is included in nep-env and nep-exp
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2346

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