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Exploring the Supply-Demand-Discrepancy of Sustainable Financial Products in Germany from a Financial Advisor’s Point of View

Author

Listed:
  • Kristin Heinemann

    (Faculty of Economics and Management, University of Kassel, 34117 Kassel, Germany)

  • Bernhard Zwergel

    (Faculty of Economics and Management, University of Kassel, 34117 Kassel, Germany)

  • Stefan Gold

    (Faculty of Economics and Management, University of Kassel, 34117 Kassel, Germany)

  • Stefan Seuring

    (Faculty of Economics and Management, University of Kassel, 34117 Kassel, Germany)

  • Christian Klein

    (Faculty of Economics and Management, University of Kassel, 34117 Kassel, Germany)

Abstract

Although retail investors’ interest in sustainable investment is constantly increasing, German credit unions and co-operative banks offer few sustainable financial products. The purpose of the study is to explore the current gap between supply and demand of sustainable financial investments in German retail banking from a financial advisor’s point of view. We use qualitative analysis of interviews with financial advisors based on a Grounded Theory approach with the aim to identify the key causation in the cause-effect relationship of the supply-demand-discrepancy. Our findings yield two explanations of the discrepancy. First, investment advisors attribute responsibility towards private investors, i.e., they ask for a clear signal whether private investors are interested in sustainable investment. Thereby, we refer to causal and responsibility attribution theory for grasping this phenomenon. Second, investors are risk-averse and therefore reluctant to invest in stocks, which represent the common form of sustainable investment in Germany. Accordingly, we propose risk averseness as a variable moderating the relationship between demand and supply of sustainable investment products within the frame of attribution theory. The study contributes towards the state-of-the-art by proposing an explanation for the mechanisms underlying the advisor-customer-relationship in the context of predominant risk-averse investment culture that currently hamper the expansion of the Socially Responsible Investment (SRI) segment of private investors in Germany. This paper outlines measures for promoting sustainable financial products in Germany, namely, among others, the creation of a more customizable offering of SRI products and the importance to inform customers about sustainable investment opportunities by advisors and banks.

Suggested Citation

  • Kristin Heinemann & Bernhard Zwergel & Stefan Gold & Stefan Seuring & Christian Klein, 2018. "Exploring the Supply-Demand-Discrepancy of Sustainable Financial Products in Germany from a Financial Advisor’s Point of View," Sustainability, MDPI, vol. 10(4), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:4:p:944-:d:137742
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    References listed on IDEAS

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    Cited by:

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    3. Athota, Vidya S. & Pereira, Vijay & Hasan, Zahid & Vaz, Daicy & Laker, Benjamin & Reppas, Dimitrios, 2023. "Overcoming financial planners’ cognitive biases through digitalization: A qualitative study," Journal of Business Research, Elsevier, vol. 154(C).
    4. Juan Camilo Mejia-Escobar & Juan David González-Ruiz & Eduardo Duque-Grisales, 2020. "Sustainable Financial Products in the Latin America Banking Industry: Current Status and Insights," Sustainability, MDPI, vol. 12(14), pages 1-25, July.
    5. Salome Zimmermann, 2019. "Same Same but Different: How and Why Banks Approach Sustainability," Sustainability, MDPI, vol. 11(8), pages 1-20, April.
    6. Markus Riegler, 2023. "Towards a definition of sustainable banking - a consolidated approach in the context of guidelines and strategies," International Journal of Corporate Social Responsibility, Springer, vol. 8(1), pages 1-26, December.
    7. Nikolas Höhnke, 2020. "Doing Good or Avoiding Evil? An Explorative Study of Depositors’ Reasons for Choosing Social Banks in the Pre and Post Crisis Eras," Sustainability, MDPI, vol. 12(23), pages 1-26, December.
    8. Marc Ringel & Saranda Mjekic, 2023. "Analyzing the Role of Banks in Providing Green Finance for Retail Customers: The Case of Germany," Sustainability, MDPI, vol. 15(11), pages 1-24, May.

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