Thursday 1 October 2020

October marks the 30th anniversary of Inquire Europe.

What will the coming three decades bring?

Throughout the year, we have delved into the research archive to examine how some of the themes and findings remain relevant today. However, it may also be an auspicious moment to consider what will propel the institute into the next three decades. Currently, there is one thing has truly taken hold of the investment industry: sustainability.

Research published in February 2020 - ‘Get Real! Individuals Prefer More Sustainable Investments’ - uses a field experiment to study sustainable investment behavior. (This is the first article that Inquire Europe has sponsored, that has a primary focus on sustainability.) The authors of the article worked together with a pension fund which had previously had minimal focus on sustainable investments; but when it gave its members a real vote on whether to increase them, their findings resonated. 

67.9% of participants voted for more sustainable investments with their pension savings at stake. Even among participants who expected lower financial returns if sustainable investments were increased, a majority voted for more sustainable investments. These results can have consequences for asset pricing and the fulfillment of the United Nations Sustainable Development Goals.

Understanding why people invest sustainably is not only important to academics, but also to institutional investors who often invest on behalf of individuals. If managed pension funds address sustainable investments on a broader scale, they could have a significant impact. But how should pension funds interpret their fiduciary duty regarding sustainable investments? How should they decide on behalf of their clients? To answer this question, the European Commission installed a HighLevel Expert Group on Sustainable Finance in 2017. On the basis of the experts’ proposal, the Commission intends to introduce a formal requirement that  'Investment firms. . . [should ask retail investors] about their preferences for sustainable investments.'”

Interested in the scientific method the authors used to elicit these preferences?
Access the article via the research archive: https://www.inquire-europe.org/research/finished-research-projects/

Additionally, we look forward to commemorating our anniversary with our members during the upcoming webinar (5 October), on Climate Finance. If you haven't yet registered, it's still  possible via: https://zoom.us/webinar/register/2415960344633/WN_ttTMI1iTS-Gn-i8dWUUKMA 

iStock-1025197782.jpg