- 14th June 2023
- 1 min read
Yes, in the same way, they care about pandas.
A recent study published shows how investors behave when talking about impact investing. In reality, how people care about impact is strongly related to the emotions associated with it.
Taking the examples with pandas, saving one or three pandas will not incentivize the person to donate more. However, the panda itself will create emotions and have a greater effect on donating people.
In impact investing, it is the same. An investor won’t be willing to pay a higher fee to drive its capital in a fund to save an extra ton of carbon. But they will be willing to pay for the positive emotion derived from investing in these sustainable products.
Might this be a problem, solutions exist. Labels and fund classification such as the Sustainable Finance Disclosure Regulation (SFDR) in Europe will reinforce the importance of investors’ choices to invest in impact funds by associating them with quantitative assessments.
Here is what the study suggest to remember, the panda bear law: If only products that actually help pandas are allowed to display pandas, we’ll have more pandas.