Wealthy private investors and socially responsible investing: The influence of reference groups

Risi, David; Paetzold, Falko; Kellers, Anne (2021). Wealthy private investors and socially responsible investing: The influence of reference groups Sustainability, 13(12931) MDPI https://doi.org/10.3390/su132212931

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Sustainable development requires a shift from traditionally invested assets to socially responsible investing (SRI), bringing together financial profits and social welfare. Private high-net-worth individuals (HNWIs) are critical for this shift as they control nearly half of global wealth. While we know little about HNWIs’ investment behavior, reference group theory suggests that their SRI engagement is influenced by their identification with and comparison to reference groups. We thus ask: how do reference groups influence the investment behavior of SRI-oriented HNWIs? To answer this question, we analyzed a unique qualitative data set of 55 semi-structured interviews with SRI-oriented HNWIs and industry experts. Our qualitative research found that, on the one hand, the family serves as a normative reference group that upholds the economic profit motive and directly shapes HNWIs to make financial gains from their investments at the expense of social welfare. On the other hand, fellow SRI-oriented HNWIs serve as a comparative reference group that does not impose any concrete requirements on social welfare performance, indirectly influencing SRI-oriented HNWIs to subordinate social concerns to financial profits. Our scholarly insights contribute to the SRI literature, reference group theory, and practice.

Item Type:	Journal Article (Original Article)
Division/Institute:	Business School > Institute for Innovation and Strategic Entrepreneurship Business School > Institute for Sustainable Business Business School > Institute for Innovation and Strategic Entrepreneurship > Decision Making Business School > Institute for Sustainable Business > Corporate Responsibility Business School
Name:	Risi, David0000-0003-1652-8806; Paetzold, Falko and Kellers, Anne
ISSN:	2071-1050
Publisher:	MDPI
Language:	English
Submitter:	David Risi
Date Deposited:	01 Dec 2021 12:11
Last Modified:	18 Jul 2023 21:46
Publisher DOI:	https://doi.org/10.3390/su132212931
ARBOR DOI:	10.24451/arbor.15835
URI:	https://arbor.bfh.ch/id/eprint/15835