Socially Responsible Investing in the Political Context

Marco Ceccarelli, Stefano Ramelli, Anna Vasileva and Alexander F. Wagner
Additional contact information
Marco Ceccarelli: VU University Amsterdam
Stefano Ramelli: University of St. Gallen - School of Finance; Swiss Finance Institute
Anna Vasileva: University of Zurich - Department of Finance
Alexander F. Wagner: University of Zurich - Department of Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute

No 25-36, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Does the political context influence the weight investors place on non-pecuniary motives when making financial decisions? We provide evidence from incentivized surveys of U.S. investors before and after the 2024 U.S. presidential election. Following Trump’s victory, investors reduced the average green investments due to a revision in financial expectations. However, investors who strongly disapprove of his climate policy increased their non-pecuniary appetite for green assets. These “contrarians” revised their investments by placing greater weight on climate-related considerations and less on financial ones, suggesting that they view green investing as a way to compensate for perceived climate policy inaction. Empirical analyses of real-world ETF flows align with this interpretation. The findings have implications for understanding and modeling values-based investment behavior.

Keywords: Beliefs; Climate change; Expected returns; Investments; Political economy; Surveys; Sustainable finance; Transition risk; Behavioral finance; Context-dependent preferences (search for similar items in EconPapers)
JEL-codes: D83 G11 G12 G41 G51 P18 (search for similar items in EconPapers)
Pages: 96 pages
Date: 2025-03
New Economics Papers: this item is included in nep-ene and nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5198512 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2536

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().