Title: Do investors compensate for unsustainable consumption with sustainable assets?
Authors: Emily Kormanyos - Goethe University Frankfurt and Leibniz Institute SAFE (Germany) [presenting]
Abstract: Categorized bank transactions are combined with Multiregional Input-Output data (MRIO) to estimate carbon footprints of consumption for over 6,000 investors. Based on checking and trading account transactions, we provide novel evidence of significant and negative spillovers between sustainable consumption and investments, especially for assets with favorable GHG-emission ratings. Several tests show that unsustainable consumption explains cross-sectional variation in sustainable investor portfolios better than alternative explanations based on heterogeneous sustainability preferences or financial motives. These results suggest that unsustainable consumers aim to offset their consumption-based emissions through sustainable investments.