Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333926 
Year of Publication: 
2025
Series/Report no.: 
SAFE Working Paper No. 463
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
This paper surveys beliefs about the climate impact of green investing among academic experts and retail investors. Using the views of academic experts as a benchmark, we show that retail investors have overly optimistic climate impact beliefs. While most academic experts do not believe that a typical green fund has a meaningful climate impact, the vast majority of retail investors do. The median retail investor expects a e10,000 green investment to offset 10% of an average person's carbon footprint. By contrast, the median estimate among academic experts is 2%, with 0% being the most common estimate. Impact beliefs influence investment decisions: When informed of academic experts' views, retail investors reduce their climate impact beliefs and willingness to pay for the green fund. Qualitative statements suggest that retail investors' optimistic beliefs are driven by a neglect of financial-market transmission mechanisms.
Subjects: 
green finance
subjective beliefs
climate change
willingness to pay
expert survey
behavioral finance
JEL: 
D14
G11
G41
H41
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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