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Professor Lars Hornuf as speaker at the Sustainable Finance Research Seminar of the University of Zurich

On November 4th, Professor Lars Hornuf presented his research project Do Retail Investors Value Environmental Impact? at the Sustainable Finance Research Seminar of the University of Zurich.

Are investors willing to give up a higher return if the investment generates positive environmental impact? Lars Hornuf and his co-author Christoph Siemroth from the University of Essex investigate this question with a decision experiment among crowdfunders, in which they choose between a higher return or environmental impact. Overall, 65% of investors choose environmental impact at the expense of a higher return for sufficiently large impact, 14% choose impact independent of the magnitude of impact, while 21% choose the higher return independent of impact. Combining the experimental data with historical investments, the authors find that investors allocate a larger share of funds to green projects if they value environmental impact more, and if they expect green projects to be more profitable. These findings suggest that investors have a preference for positive environmental impact, and satisfy it by investing in green projects. The authors further show that the preference for environmental impact is distinct from a preference for positive social impact. Finally, the authors introduce new survey measures of impact for future use, which are experimentally validated and predict field behavior.