ESG Aversion: Experimental Evidence on Perceptions and Preferences

Ye Zhang and Eric Zou

No 34048, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop an experimental framework to separate belief- from taste-based demand for Environmental, Social, and Governance (ESG) partnerships. In two symmetric experiments with real startup founders and VC investors, we found evidence of significant ESG penalty: profiles randomly labeled as ESG received less interest from both sides, driven by beliefs that ESG partners are less profitable and accessible. A willingness-to-pay task then revealed a latent taste for ESG: participants sacrificed lottery payoffs to receive additional match recommendations of ESG-oriented partners when profitability was held fixed. Overall, the evidence shows a market tension: performance concerns obscure an underlying taste for ESG.

JEL-codes: C91 C93 G24 L26 M13 Q56 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-exp
Note: CF EEE PR
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