Beyond risk and return: What motivates environmentally friendly or harmful student fund investments in Germany?

For the sustainable development of the energy and agricultural sectors, it is necessary to have financial investments carried out by private households. Therefore, this study examines individuals investing in funds ranging from environmentally friendly (wind energy, organic farming) to environmentally harmful (mineral oil / natural gas). First, we analyze the relative importance of return, risk and durations, and the aspect of sustainability in the decision-making process about financial investments. Second, the intention to invest in environmentally friendly or harmful investment fields is analyzed according to economic, environmental self-identity, as well as personal norms concerning individual contributions to the climate targets of the Paris Agreement. We applied a choice-based conjoint experiment in a laboratory with 226 participating students primarily studying Business (n = 117) in Germany. The results show that the annual returns and risks are the most important attributes for the fund decisions of students followed, by the investment fields. Subjects prefer investments in wind energy. However, organic farming investments were not in great demand. Personal norms (Paris Agreement) are positively linked to investment intentions for organic farming and negatively linked to investment intentions for mineral oil / natural gas. Wind energy investment intentions are not explained by self-identity or personal norms (Paris Agreement).