Optimistic framing increases responsible investment of investment professionals.

Daugaard, Dan and Kent, Danielle and Servátka, Maroš and Zhang, Le (2023): Optimistic framing increases responsible investment of investment professionals.

Abstract

The global warming crisis is unlikely to abate while the world continues to collectively fund the extraction and burning of fossil fuels. Carbon divestment is urgently needed to ward off the impending climate emergency. Yet responsible investments still only account for a modest share of global assets. We conduct an incentivized artefactual field experiment to test whether framing divestment as a social norm, communicating it by a person with perceived credibility and expertise (a messenger), and highlighting optimistic attributes bolster responsible investment. Our subjects are investment professionals who have significant influence over the allocation of funds. We provide evidence that optimistic framing increases responsible investment. Assuming a comparable effect size, the observed increase would represent a $3.6 trillion USD global shift in asset allocations.

• Item Type: MPRA Paper
• Language: English
• Keywords: experiment, ESG, responsible investment, optimism, framing
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments; G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions

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