Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306359 
Year of Publication: 
2024
Series/Report no.: 
SAFE Working Paper No. 431
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
We present novel evidence that retail investors attempt offsetting their carbon footprints by investing sustainably. Using highly granular transaction data from bank clients, we find that higher footprints are linked to greener portfolios. In an experiment with clients from the same bank, we show that an exogenous shock to the participants' salience of their emissions causally shifts sustainable asset allocations upward. Finally, we identify a substitution effect between offsetting through donations and sustainable assets. Our findings add to an understanding of the behavioral drivers of sustainable investing, which is crucial to design effective policies aligning financial markets with environmental goals.
Subjects: 
sustainable investing
carbon footprints
green portfolios
retail investors
experimental finance
JEL: 
G40
G41
G11
D14
C93
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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