Wilkens, M. & C. KleinWhat are the potential transformative effects of sustainable investments made by consumers?

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Marco Wilkens & Christian Klein

Release date:
January 2021

Federation of German Consumer Organizations (vzbv), Team Finance

Currently, the thesis is often advocated that consumers can make important contributions to a more sustainable economy and society through their investments, such that it would be possible to help curb climate change through certain financial investments. At the same time, politicians are taking various legal measures to ensure that 'sustainable finance' is firmly anchored in the private customer business of the financial industry.

In principle, many consumers are willing to make a contribution to the transformation of the economy and society through their investments. At the same time, however, there is a high level of uncertainty as to whether and how specifically such a contribution can actually be made and what costs are involved. Hence, from the point of view of consumer protection, the question is what transformative effects or impact consumers can actually have through the most important forms of sustainable investments.

The causal relationships that are fundamental for this investigation are very complex and so far hardly covered in the scientific literature. In this report, the fundamental interdependencies are elaborated upon as clearly as possible in order to contribute to the reduction of information asymmetries between consumers, consumer advice and politics on the one hand and the financial industry on the other. This should motivate for further discussions and research on this important issue. The authors are focussing on the overall goal of containing climate change, i.e. the reduction of CO2 emissions. Their considerations can generally be transferred to other sustainability goals.

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