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Between impact and returns: Private investors and the sustainable development goals


Paetzold, Falko; Busch, Timo; Utz, Sebastian; Kellers, Anne (2022). Between impact and returns: Private investors and the sustainable development goals. Business Strategy and the Environment, 31(7):3182-3197.

Abstract

We investigate the expectations of wealthy private investors regarding the impact and financial return of sustainable investments. Our paper focuses on the sustainable development goals (SDGs) as a framework for investors' attempts to create impact. We analyze the behavior of 60 high-net-worth individuals (HNWIs), a powerful yet overlooked investor segment. Our results show large allocations in line with the SDGs, which demonstrates these investors' aim of achieving real-word changes. Furthermore, we show that these “impact investors” have a clear preference for SDGs that are associated with high financial returns. As such, we confirm that both impact and attractive financial returns are expected. Our findings provide rich, deep insights into how HNWIs practice impact investing and their underlying motivations. We outline practical implications for different stakeholders, notably regarding the fact that financially attractive SDGs are likely to attract substantial amounts of capital, with other SDGs remaining underfunded.

Abstract

We investigate the expectations of wealthy private investors regarding the impact and financial return of sustainable investments. Our paper focuses on the sustainable development goals (SDGs) as a framework for investors' attempts to create impact. We analyze the behavior of 60 high-net-worth individuals (HNWIs), a powerful yet overlooked investor segment. Our results show large allocations in line with the SDGs, which demonstrates these investors' aim of achieving real-word changes. Furthermore, we show that these “impact investors” have a clear preference for SDGs that are associated with high financial returns. As such, we confirm that both impact and attractive financial returns are expected. Our findings provide rich, deep insights into how HNWIs practice impact investing and their underlying motivations. We outline practical implications for different stakeholders, notably regarding the fact that financially attractive SDGs are likely to attract substantial amounts of capital, with other SDGs remaining underfunded.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
03 Faculty of Economics > Center for Sustainable Finance and Private Wealth (CSP)
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Business and International Management
Social Sciences & Humanities > Geography, Planning and Development
Social Sciences & Humanities > Strategy and Management
Physical Sciences > Management, Monitoring, Policy and Law
Scope:Discipline-based scholarship (basic research)
Language:English
Date:November 2022
Deposited On:30 Dec 2022 06:32
Last Modified:28 Jun 2024 01:37
Publisher:Wiley-Blackwell Publishing, Inc.
ISSN:1099-0836
OA Status:Green
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1002/bse.3070
Official URL:https://doi.org/10.1002/bse.3070
Other Identification Number:merlin-id:23019
  • Content: Published Version
  • Licence: Creative Commons: Attribution-NonCommercial 4.0 International (CC BY-NC 4.0)