Do Investors Value Sustainability? A Natural Experiment Examining Ranking and Fund Flows

Samuel Hartzmark, Abigail Sussman

2019 | Academic | Funds, Investor Behavior, Sustainable Investing

Experimental evidence suggests that sustainability is viewed as positively predicting future performance, but we do not find evidence that high sustainability funds outperform low sustainability funds. The evidence is consistent with positive affect influencing expectations of sustainable fund performance and non-pecuniary motives influencing investment decisions.