Optimistic framing increases responsible investment of investment professionals

Dan Daugaard; Danielle Kent; Maroš Servátka; Lyla Zhang

doi:10.1038/s41598-023-50965-w

Optimistic framing increases responsible investment of investment professionals

Sci Rep. 2024 Jan 5;14(1):583. doi: 10.1038/s41598-023-50965-w.

Authors

Dan Daugaard¹, Danielle Kent², Maroš Servátka^{3

4}, Lyla Zhang³

Affiliations

¹ University of Tasmania, Hobart, Australia.
² Discipline of Finance, University of Sydney Business School, The University of Sydney, Sydney, Australia. danielle.kent@sydney.edu.au.
³ MQBS Experimental Economics Laboratory, Department of Economics, Macquarie Business School, Macquarie University, North Ryde, Australia.
⁴ University of Economics in Bratislava, Bratislava, Slovakia.

Abstract

The global warming crisis is unlikely to abate while the world continues to collectively fund the extraction and burning of fossil fuels. Carbon divestment is urgently needed to ward off the impending climate emergency. Yet responsible investments still only account for a modest share of global assets. We conduct an incentivized artefactual field experiment to test whether framing divestment as a social norm, communicating it by a person with perceived credibility and expertise (a messenger), and highlighting optimistic attributes bolster responsible investment. Our subjects are investment professionals who have significant influence over the allocation of funds. We provide evidence that optimistic framing increases responsible investment. Assuming a comparable effect size, the observed increase would represent a $3.6 trillion USD global shift in asset allocations.