Understanding what drives individual investors’ sustainability preferences has become increasingly important as sustainable investing grows in prominence. While many assume that aligning investment decisions with endinvestor values will naturally increase emphasis on sustainability, existing evidence paints a more complex picture. This project seeks to understand the underlying drivers of these preferences, how they interact, and what they mean for investor behaviour and market outcomes.
Investor preferences towards sustainable investments remain contested. Some argue that valuesdriven investing can enhance engagement, deepen accountability, and support longterm risk management. Others believe that enthusiasm for sustainable products is overstated, that investors lack clarity about what sustainability means, or that preferences for “green” products may reflect psychological or symbolic motivations rather than expectations of realworld impact. These debates have intensified amid mixed performance of sustainable funds and increasing scrutiny of ESG labels and claims.
The project investigates both the motivations retail investors articulate and the behaviours they exhibit when allocating capital across sustainable and traditional products through a combination of academic literature review, surveys and observational data.
This research project is funded by the Brown-Gonzalez Charity and the Global School of Sustainability.
LSE Research Team: and led by Professor Tom Gosling and Dr Cameron Peng.
For more information contact Tom Gosling.
