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Sustainable Investment: Consequences for Psychological Well-Being

Author

Listed:
  • Tommy Gärling

    (Department of Psychology, University of Gothenburg, P.O. Box 500, 40530 Göteborg, Sweden)

  • Magnus Jansson

    (Gothenburg Research Institute, School of Business, Economics, and Law, University of Gothenburg, P.O. Box 603, 40530 Göteborg, Sweden
    Department of Social Psychology, University of Skövde, P.O. Box 408, 54128 Skövde, Sweden)

Abstract

This paper sets the stage for research on sustainable investment (SI) related to psychological well-being (PWB). It recognizes the threat of current global consumption levels to exceed the planetary boundaries and asks what roles financial markets may play in reducing these threats without compromising PWB. SI integrates environmental (E), social (S), and governance (G) factors alongside financial factors in investments in company shares and bonds as well as through active engagement in companies. Barriers to ESG integration include lower short-term financial performance, higher financial risks, and insufficient ESG screening by investors. A brief review of PWB shows that reliable and valid measurement methods have been developed, that the resulting measures complement economic and social national welfare indicators, and that health, sufficient material welfare, income equality, and non-material consumption are important determinants of PWB. The challenge is to globally reduce private material consumption levels in affluent countries. It is suggested that one role SI may play is in investing or actively engaging in companies that efficiently meet an increasing consumer demand of non-material consumption. Future research should address this role of SI.

Suggested Citation

  • Tommy Gärling & Magnus Jansson, 2021. "Sustainable Investment: Consequences for Psychological Well-Being," Sustainability, MDPI, vol. 13(16), pages 1-10, August.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:16:p:9256-:d:616544
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