Sustainable Finance Literacy and the Determinants of Sustainable Investing

Massimo Filippini, Markus Leippold and Tobias Wekhof
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Markus Leippold: University of Zurich; Swiss Finance Institute - University of Zurich
Tobias Wekhof: ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

No 22-02, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: This paper introduces the concept of sustainable finance literacy, which refers to retail investors' knowledge of regulations, norms, and standards for financial products with sustainable characteristics. We survey a large sample of Swiss households and measure different literacy concepts using two complementary approaches. First, we use traditional multiple-choice questions, and second, a novel approach based on open-ended questions that ask respondents to write a text response. We find that Swiss households, which typically show high financial literacy by international standards, exhibit a low level of sustainable finance literacy. Interestingly, multiple-choice questions lead to a gender gap, with women performing worse than men. However, this difference disappears when open-ended questions are used. Moreover, despite its low level, sustainable finance literacy is a highly significant factor for sustainable product ownership. Therefore, our results reveal an urgent need to establish transparent regulatory standards and strengthen information campaigns on sustainable financial products.

Keywords: Sustainable finance literacy; sustainable finance products; ESG; household finance; open-ended questions; gender gap (search for similar items in EconPapers)
JEL-codes: C83 G02 G11 G18 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2022-01
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-env and nep-fle
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Sustainable finance literacy and the determinants of sustainable investing (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2202

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