Rich and responsible? The Rise of Responsible Investors

Prof. Kasper Meisner Nielsen, Copenhagen Business School
Tuesday, August 29, 2023
9:30-11:00

What is motivating the rise of responsible investing? In this seminar, Prof. Kasper Meisner Nielsen will present his research paper “Rich and responsible?” which finds that investors perceive responsible investing as a “luxury good”.

This research studies the rise of responsible investing (i.e., investing in assets with environmental and social benefits as well as financial returns) among investors in Denmark. From 2011 to 2021, the average portfolio weight of responsible assets increases from 2.4% to 5.2%, driven by an increasing fraction of investors with responsible mutual funds (0.9% to 11.3%) and green energy stocks (8.1% to 14.4%). Motivated by the observation that responsible investments concentrate among wealthy investors, we use windfall wealth from inheritances to document that investors perceive responsible investing as a luxury good, with demand partially motivated by a “warm glow” effect.