Sustainable and Responsible Investments Choice Among Private Investors : Some key determinants and the effect of limited knowledge and information

Abstract: Purpose – BecauseThe purpose of this thesis is to investigate what methods financial institutions use to inform and encourage their existing and potential clients to choose more sustainable and responsible investment alternatives. The thesis should also identify some key determinants of private investors’ choice of sustainable and responsible investments (SRI), with focus on the effect of limited knowledge and access to information about SRI has on private investors’ choice. Methodology – In this thesis, both qualitative and quantitative research methods are used to collect significant data. Qualitative data was collected through interviews with three representatives from different financial institutions. A questionnaire was distributed and answered by 36 respondents. Quantitative data was collected using a questionnaire, the processed and analyzed by using a comparison analysis of percentages. Findings – Overall, the thesis finds that financial institutions have limited focus on private investors and lack of concrete methods to provide private investors with relevant information and thus increasing the level of knowledge about SRI. Furthermore, the results indicate that earning steady financial returns by considering social responsibility is one of the motivations to invest in SRI. Women are more likely to choose SRI than men and millennials prefer SRI more compared to other generations. Limited knowledge and limited access to useful information are considered as strong obstacles for private investors when considering SRI. Research limitations – Since the sample size was very small, it’s probable that the respondents’ opinions and approach to SRI cannot represent the view of the entire population. Because of the sample size there’s an enormous variation in response patterns. Therefore, the results and conclusions need to be taken cautiously.