Looking beyond sustainability preferences: The role of sustainable finance literacy in sustainable investing

We assess whether providing an information brochure about sustainable investments affects young German retail investors’ sustainable investment behaviour using a pre-registered experiment. We find that the brochure increases sustainable finance literacy and leads to an increase in the probability of investing sustainably of 8 to 9 percentage points. This effect interacts with sustainability preferences. In the absence of moderate sustainability preferences, any additional increase in sustainable finance literacy is at minimum irrelevant. Overall, our findings show that information provision shapes sustainable investment decisions, and that sustainability preferences alone do not account for them.