Shifting investors towards social responsibility : a narrative review of effective intervention strategies

Abstract

his article provides a comprehensive overview of the most promising behavioral interventions to foster socially responsible investment (SRI) among retail investors. Using the SHIFT framework, five key avenues that underpin sustainable behavior change are elaborated: harnessing social influences, embedding new investment habits, navigating individual influences, as well as feelings and cognitive drivers, and enhancing SRI’s tangible impact. Significant barriers arise from the lack of comparability, reliability and tangibility of SRI information, exacerbated by low levels of SRI and financial literacy. Meanwhile, investors often perceive SRI as underperforming. Promising interventions include simplifying the decision-making context through labelling and defaults, tailoring information to specific motives and capturing the tangible impact of SRI to increase self-efficacy. Priming and framing techniques can be used to create a long-term focus, leverage social and personal norms, and activate self-conscious emotions such as guilt and pride, or align financial with ethical interests. Despite growing academic evidence on the drivers and barriers to SRI, this narrative literature review encourages more research that causally tests intervention strategies aimed at changing investor behavior toward socially responsible investing.