Abstract
AbstractThis article examines the determinants of the optimal percentage that private investors seek to invest in a socially responsible (SR) way when forming their portfolio. By conducting a global online survey in English, German and French, we find indications that it is sufficient for the majority of investors to have a certain amount of their budget invested sustainably. Accordingly, the optimal proportion tends to be lower the higher the available investment volume is. In addition, the non-financial utility derived from SR investments appears to be independent of the form of financing the investor provides. Moreover, the results show that well-educated women and slightly younger persons seek to invest a higher percentage of their portfolio socially responsibly.
Highlights
This paper addresses the question of the optimal proportion of socially responsible (SR) investments investors wish to hold in their portfolio
While financial utility is obtained by high financial performance and low variation in returns, these results indicate that investors derive non-financial utility from investing socially responsibly
The main aim of this study is to determine empirically the variables that influence the optimal proportion of SR investments
Summary
This paper addresses the question of the optimal proportion of socially responsible (SR) investments investors wish to hold in their portfolio. While several studies attempt to explain by socio-demographic characteristics why some investors care more about non-financial issues in their asset allocation decision (e.g., Rosen et al 1991; Haigh 2008; Berry and Junkus 2013), to our knowledge, no study examines the determinants of the desired percentage to be invested socially responsibly. To this end, we conduct a global online survey in English, German and French among private investors. The optimal proportion of SR investments is influenced by the available investment volume, and linked to the perception of benefits that individuals derive from the socially responsible attribute
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