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Sustainable finance & consumer protection

Overview of research findings

When surveyed about 2/3 of citizens say they want to invest sustainably, and 40-50% say they want to have a measurable impact in the real economy through their investments and savings, climate mitigation being one of the top priorities. 


The first behavioural finance field experiments conducted by the University of Maastricht suggest that end-users walk the talk when they have the possibility to do so. However, another experiment conducted by the University of Zurich suggests that individuals optimize the warm glow associated with their investment decisions rather than their actual impact as investors. 


Many other barriers appear when individuals have to combine financial objectives (returns, risk, etc.) with environmental objectives:  

  • The low level of literacy of the average citizen on both financial aspects and sustainable finance create a major obstacle when it comes to forming an opinion about their preferences, and for financial advisors to ask questions about the matter. 
  • On the product side, the offer appear not to match retail investors preferences and most environmental impact claims made by fund managers could be categorised as misleading.  


As a result, "individual impact investors" constitute a 'silenced' majority. In Europe, preliminary evidence suggests that at least 75 million people might be currently invested in financial products that are considered ‘unsuitable’ by the existing regulation. 


Addressing this problem will require progress on impact measurement, behavioural finance, fintech innovation and further changes in regulatory framework.  

Book

Individual Impact Investors: The Silenced Majority

Chapter in "Making the Financial System Sustainable" 

(Cambridge University Press, 2020, edited by Paul Fischer) 

Search inside
Get the book

Collective book from the members of the EU High Level Expert Group on Sustainable Finance. Stan Dupre's chapter focus on the integration of sustainability into financial advice and the related reform of MIFID/IDD.

About the regulatory reform

Featured papers from academic partners

Get Real! Individuals prefer more sustainable investments

Get Real! Individuals prefer more sustainable investments

Get Real! Individuals prefer more sustainable investments

Behavioural finance experiment - Bauer et al (2018)

Download (100 pages)

Do Investors Care about Impact?

Get Real! Individuals prefer more sustainable investments

Get Real! Individuals prefer more sustainable investments

Investors tend to optimize the warm glow - Heeb et al (2021)

Download (50 pages)

Can Sustainable Investing Save the World?

Get Real! Individuals prefer more sustainable investments

Can Sustainable Investing Save the World?

Reviewing the mechanisms of investor impact - Köelbel et al (2020)

Download (500 pages)

2° Investing Initiative papers on the topic

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More 2° Investing Initiative papers on the topic

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To be or not to be (sustainable)

Better, but not there yet

Why sustainable products do not match consumers' preferences

Download (German)

Better, but not there yet

To be or not to be (sustainable)

Better, but not there yet

About the draft EU Ecolabel criteria (v2)

Download (30 pages)

To be or not to be (sustainable)

To be or not to be (sustainable)

To be or not to be (sustainable)

Paths for integrating sustainability into the suitability questionnaire

Download (German, 40 pages)

Impact washing gets a free ride

Diversification and Energy transition

To be or not to be (sustainable)

About the draft EU Ecolabel criteria (v1)

DOWNLOAD (50 pages)

Diversification and Energy transition

Diversification and Energy transition

Diversification and Energy transition

What's does diversification means in a transition scenario?

Download (25 pages)

EU Climate Benchmarks...

Diversification and Energy transition

Diversification and Energy transition

Technical feedback on the regulatory framework

Download (12 pages)

2020 2Dii webinar on consumer protection

Analysis of impact claims by fund managers (20 min)

Presentation of the paper "EU retail funds Environmental Impact Claims do not comply with regulatory guidance" (2020)

Download the paper

Analysis of EU sustainable investment funds (10 min)

Presentation of the analysis of 280 funds by Better Finance, the European Federation of individual investors and pension funds beneficiaries. 

Overview of consumer surveys results (15 min)

Presentation of 2Dii surveys in France and Germany (2019-20) and review of other consumer surveys across the world

Download the paper

Results of behavioural finance field experiments (10 min)

Presentation of the results of the experiment conducted by the University of Maastricht (paper Get Real! Individuals prefer more sustainable investments - 2018)

Download the paper

The policy context in Europe (10 min)

Presentation of the EU action plan and regulatory package related to consumers by WWF European Policy Office

The measurement of financial products' impact (15 min)

Summary of the University of Zurich research findings on the definition and measurement of investor impact. 

Download the paper

Can retail investors vote for Paris? (15 min)

Presentation of 2DII's paper on the possibility for individual shareholder to support climate resolutions

Download the paper

Introduction to the EU Ecolabel on financial products (15 min)

Presentation by the European Commission

2Dii's feedback on the Ecolabel draft criteria (20 min)

Presentation of the feedback paper regarding the shortcomings of the second draft criteria (2020)

Download the paper
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