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What drives retail portfolio exposure to ESG factors?

Author

Listed:
  • D’Hondt, Catherine

    (Université catholique de Louvain, LIDAM/LFIN, Belgium)

  • Merli, Maxime
  • Roger, Tristan

Abstract

Using both survey and trading data from 9,286 retail investors for the 2005–2011 period, we highlight the impact of financial literacy and risk tolerance on retail stock portfolio exposure to environmental, social and corporate governance (ESG) factors. Our results also reveal that the three ESG factors are not homogeneous and should be considered separately. Lower exposure to ESG factors during the crisis period suggests that ESG investing is a luxury good for most investors.

Suggested Citation

  • D’Hondt, Catherine & Merli, Maxime & Roger, Tristan, 2021. "What drives retail portfolio exposure to ESG factors?," LIDAM Reprints LFIN 2021020, Université catholique de Louvain, Louvain Finance (LFIN).
    • Handle: RePEc:ajf:louvlr:2021020
    DOI: https://doi.org/10.1016/j.frl.2021.102470
    Note: In: Finance Research Letters, 2021, 102470
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    Citations

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    Cited by:

    1. Simona Galletta & Sebastiano Mazzù, 2023. "ESG controversies and bank risk taking," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 274-288, January.
    2. Christos Papademetriou & Konstantina Ragazou & Alexandros Garefalakis & Ioannis Passas, 2023. "Green Human Resource Management: Mapping the Research Trends for Sustainable and Agile Human Resources in SMEs," Sustainability, MDPI, vol. 15(7), pages 1-26, March.

    More about this item

    Keywords

    ESG factors ; Crises ; Financial literacy ; Risk tolerance ; Retail investors;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G40 - Financial Economics - - Behavioral Finance - - - General

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