Investors' preferences for sustainable investments: evidence from the U.S. using an experimental approach

In addition to the classical risk-return approach in investment, there is an increasing awareness of integrating sustainable development goals (SDGs) as a new dimension to value creation. However, limited research has been conducted, offering mixed results. Therefore, we examined investor preferences for investment funds that contribute to achieving the SDGs of clean water and sanitation. We used a choice experiment to analyze the funds' value for U.S. investors, adopting a survey approach based on 581 actual observations from October to December 2022. The findings reveal that investors show stronger preferences for portfolios that contribute to the development goals; they are willing to forgo returns when investments contain SDGs or are provided by sustainable banks. These findings have implications for investors and fund managers.