Between impact and returns: Private investors and the sustainable development goals. (11th April 2022)

• Record Type: Journal Article
• Authors: Paetzold, Falko; Busch, Timo; Utz, Sebastian; Kellers, Anne
• Is Part Of: Business strategy and the environment. Volume 31:Number 7(2022)
• Page Start: 3182
• Page End: 3197
• Publication Date: 2022-04-11
• Subjects: financial return expectations -- HNWIs -- impact investments -- sustainable development goals; Industrial management -- Environmental aspects -- Periodicals; Industries -- Environmental aspects -- Periodicals; 658.4083
• DOI: 10.1002/bse.3070
• Languages: English
• ISSNs: 0964-4733

Abstract

Abstract: We investigate the expectations of wealthy private investors regarding the impact and financial return of sustainable investments. Our paper focuses on the sustainable development goals (SDGs) as a framework for investors' attempts to create impact. We analyze the behavior of 60 high‐net‐worth individuals (HNWIs), a powerful yet overlooked investor segment. Our results show large allocations in line with the SDGs, which demonstrates these investors' aim of achieving real‐word changes. Furthermore, we show that these "impact investors" have a clear preference for SDGs that are associated with high financial returns. As such, we confirm that both impact and attractive financial returns are expected. Our findings provide rich, deep insights into how HNWIs practice impact investing and their underlying motivations. We outline practical implications for different stakeholders, notably regarding the fact that financially attractive SDGs are likely to attract substantial amounts of capital, with other SDGs remaining underfunded.