Investors' preference for carbon information in the context of impact investing: A Discrete Choice Experiments with the Swedish retial investors

Summary

More investors are getting aware about the effects of climate change and are prioritizing investments in the companies with better environmental performance. Consequently, investors rely on the disclosed information in the companies’ sustainability report, e.g. carbon information related to past emission and also the expected future performance to make sound judgement related to investment opporunities. The purpose of this study is to analye how the retail investors prioritizes information about carbon information, specifically, carbon targets and related attribues in making investment decisions.

This study applies experimental design using Discrete Choice Analysis as methods of data analysis. Additonally, it used multinomal logit with conditional logit using STATA for statistical analysis. Finally, the findings suggest that the Swedish private investors do not favor investing in the companies producing higher emissions than the average industry emissions. In addition, target difficulty and ‘on track’ progress status of emissions targets were the two most dominant attributes among the attributes of carbon information affecting the choice decisions of the participants positively.