Socially Responsible Investing: the green attitudes and grey choices of Australian investors

TLDR

The study investigates why Australian investors hold positive attitudes toward socially responsible investing (SRI) yet invest little in it, hypothesizing that stronger environmental commitment predicts higher SRI investment. Surveying 318 employees from two large Queensland organisations, the authors measured investment attitudes and preferences. Results show environmentalists value SRI criteria more than non‑environmentalists, yet their investment choices prioritize financial performance over SRI, indicating a disconnect that could hinder SRI fund growth.

Abstract

This Australian study seeks to better understand the disparity between the positive attitudes towards Socially Responsible Investing (SRI) and the level of investment in SRI, by examining both the attitudes to SRI and the investment choices that are made. It is hypothesised that those who are more committed to principles of environmental sustainability are more likely to invest in SRI. To test this, 318 people from two large Queensland organisations are surveyed in relation to their investment attitudes and preferences. We find that there are significant differences in investment attitudes with environmentalists placing more importance on SRI investment criteria. However, there was no significant difference between environmentalists and non‐environmentalists in terms of utility scores from an investment selection experiment with the environmentalists placing higher importance on financial performance criteria than SRI criteria, making choices similar to those with the lowest level of environmental activism. Furthermore, the observed lack of congruency between attitudes and choices in relation to environmental criteria may have implications for the growth of SRI funds.