Understanding individual investors’ preferences and knowledge of sustainable investments
Time: Thu 2023-06-08 15.00
Location: E2, Osquars Backe 2, Campus
Video link: https://kth-se.zoom.us/s/67572051180
Language: English
Subject area: Business Studies
Doctoral student: Ida Ayu Agung Faradynawati , Fastigheter och byggande, Real Estate Business and Financial Systems
Opponent: Docent Jeanette Carlsson Hauff, Göteborgs Universitet
Supervisor: Docent Ingalill Söderberg, Fastighetsföretagande och finansiella system; Professor Annina H. Persson, Fastigheter och byggande; Professor Misse Wester, Lunds Universitet
QC 230509
Abstract
This thesis aims to contribute to the field of sustainable investment by investigating individual investors’ preferences and knowledge level of sustainable investments. To achieve this objective, this thesis examined the impact of investment-related attitudes and demographic characteristics on sustainable investment choices through secondary data analysis and assessed investors’ knowledge level regarding sustainable investments through a survey. Both the secondary data and the survey used individual investors in Nordic regions as the sample. The data analysis was performed using logistic regression and ordinary least square regression methods. The results show that risk-averse investors and investors with shorter investment horizons were more likely to choose sustainable investments. In terms of sociodemographic characteristics, sustainable investments were preferred by older, female, and less wealthy clients. Furthermore, after understanding the characteristics of individuals with sustainable investment choices, this thesis measured the knowledge level of sustainable investors and examine the relationship between investors’ knowledge level and information-seeking and advice-seeking behavior. The findings suggest that most sustainable investors had high objective financial literacy but scored low in sustainability knowledge and even lower in sustainable finance literacy. Sustainable investors search for information more actively when they have a high perceived knowledge compared to their actual knowledge. In evaluating advice-seeking behavior, it was discovered that sustainable investors who perceive themselves to be more financially literate are more likely to receive advice on sustainable investments from financial advisors. Yet, those who saw themselves as having greater sustainability literacy were less inclined to consult their financial advisors before making sustainable investing decisions. In regards to product literacy, this study found that the key information about the dark green fund, with the highest sustainable disclosure requirements, was not easy to understand compared to the ones with lower requirements.