On November 4^th, 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.