Promoting environmentally and socially responsible investing: interplay between climate and financial literacy

The escalating negative consequences of climate change necessitate a deeper understanding of its impact on investment decisions. This study investigates the role of financial and climate literacy as key determinants influencing individuals’ willingness to potentially make socially and environmentally responsible investment (SRI) decisions. Based on a large-scale CAWI survey of 1012 adults in Poland in 2024, our findings demonstrate that climate literacy significantly enhances the propensity to engage in SRI, notably surpassing the influence of financial literacy. Results indicate a lower inclination among younger generations to prioritize SRI, highlighting the urgent need for tailored climate education within this demographic. We underscore the importance of incorporating climate literacy into all levels of formal education to cultivate informed and responsible investment behaviours. The study offers practical insights for policymakers, financial advisors, and educators aiming to advance sustainable financial practices.Achieving climate policy objectives requires mobilizing investment resources, which can be effective only if accompanied by widespread climate education. Empowering individuals with climate knowledge can motivate them to align their investments with sustainability goals.The effectiveness of climate regulations will be greater if climate education initiatives are introduced alongside them. Educating the public increases the likelihood of understanding and supporting necessary climate policy measures.A dedicated climate policy that focuses on the attitudes and behaviours of younger generations is essential. Our findings reveal a substantial gap in climate knowledge among these demographic groups, indicating the need for targeted education to make their investment decisions more sustainable.