Abstract

Climate action is one of the biggest moral imperatives of our time. Carbon divestment is urgently needed to ward off the impending climate emergency. Yet sustainable investments still only account for a modest share of global assets. Findings from the field of moral psychology suggest that the human moral judgement system is not well equipped to process climate change as an important moral problem. Climate change fails to activate an urgency for action in the way that other moral imperatives do. We conduct a randomized controlled experiment with 335 investment professionals to test four strategies that communicators might use to bolster the moral imperative for sustainable investment. We provide evidence that optimistic framing encourages greater responsible investment decisions of sophisticated investment managers. This finding is important because investment professionals have significant influence over the allocation of funds to sustainable investments. We demonstrate that strengthening the moral sentiments of investment experts increases sustainable investment by almost 4 percent. The potential impact of optimistic framing cannot be understated. Assuming a comparable effect size, the increase would represent a $3.6 trillion USD global shift in asset allocations.