I am pleased to announce that my latest joint research with Marcel Seifert, Aja Ropret Homar, Florian Spitzer, Erich Kirchler and Katharina Gangl has been published in the Journal of Behavioral and Experimental Finance. Our study explores how sustainable finance literacy (SFL) — the specific knowledge needed to navigate sustainable and ESG investments — shapes real-world investment decisions. Using two large, representative samples from Austria, we develop a robust SFL inventory and test its predictive power in both incentivized experiments and self-reported investment behavior.
Our findings show that SFL isn’t just a buzzword: it’s a strong, independent predictor of whether people invest in the stock market, choose sustainable assets, and avoid potentially greenwashed products. In fact, SFL explains investment behavior above and beyond traditional financial literacy measures. Participants with higher SFL were more likely to invest in stocks and to allocate more to sustainable and less to greenwashed assets. SFL also helped investors better spot misleading sustainability claims.
The study lays the groundwork for our next paper, in which we show that the link between SFL and investment behavior is not just correlation, but that increasing the former can actually improve the latter.
As with my previous submissions to JBEF, the entire review process was handled independently by the editorial team (blinded to myself).