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Understanding consumer preferences and behaviours

The University of Cambridge Institute for Sustainability Leadership’s Investment Leadership Group (ILG) is supporting an innovative research project on investment choice. The research will provide investors with a greater understanding of how the investing public reacts to environmental and social impact data in their decision-making.

 

The Virtual Investment Experiment (VIE)


Sutainable Development Goals

This innovative study: Walking the Talk: understanding consumer appetite for sustainable investing involved a virtual investment experiment (VIE) designed to simulate real investment choices to help understand the extent to which savers value sustainability. It was undertaken in collaboration with Cambridge academics from the University’s Psychometrics Centre and the Department of Psychology.

The study analysed the decision-making of individual savers by inviting them to choose between pairs of differently specified funds. Based on clearly presented financial and sustainability information (based on the Investment Impact Framework), participants were presented with pairs of funds and asked where they would prefer to invest.

The study fills a large research gap; all other such studies to date have been based on self-reported investment intentions, rather than indicating how people behave when they are investing their own money. In order to incentivise real investment behaviour, participants were informed that they had a chance of receiving a significant investment in one of the funds they selected.

The study demonstrates that public interest in sustainability does influence investment preferences when suitable information is provided.

The long-term vision of this work is to enable a shift in investment choice, wherein social and environmental impact is transparent to investment beneficiaries in the same way that it is apparent to food and energy consumers today.

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Members

Investment Leaders Group members. Cambridge Institute for Sustainability Leadership.

 *HSBC Bank (UK) Pension Scheme

Contact

Kajetan

Kajetan Czyz, Senior Programme Manager, Investment Leaders Group