Moral Licensing through ESG Investments: Causal evidence on individual preferences and actions

Last registered on July 20, 2023
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Pre-Trial

Trial Information

General Information

Title
Moral Licensing through ESG Investments: Causal evidence on individual preferences and actions
RCT ID
AEARCTR-0011792
Initial registration date
July 19, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
July 20, 2023, 5:39 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Germany
Region

Primary Investigator

Name
Jakob Famulok
Affiliation
Goethe Universität Frankfurt
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2023-07-19
End date
2023-08-11
Keywords
Behavior, Finance & Microfinance
Additional Keywords
climate, sustainable finance
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We study “moral licensing” as potential driver for sustainable investments. We will run an RCT with 3000-4000 clients of a bank, who will be allocated into one of three treatments. All participants will be asked to allocate 12500€ between a sustainable and a classic fund. In treatment 1, we will provide indiviudals with their own carbon footrprint relative to their peers. In treatment 2 we will ask them to allocate 250€ between themselfes and a carbon offsetting organization afterwards. In treatment 3, participants will only get the carbon offsetting decision as a treatment.
By investigating whether individuals who invest in ESG products give themselves a moral license to engage in less sustainable consumption, we aim to gain insights into potential net negative externalities of sustainable investing.
External Link(s)

Registration Citation

Citation
Famulok, Jakob. 2023. "Moral Licensing through ESG Investments: Causal evidence on individual preferences and actions." AEA RCT Registry. July 20. https://doi.org/10.1257/rct.11792-1.0
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Experimental Details

Interventions

Intervention(s)
We send out invitation mails to ~350,000 customers of a German bank. The sample will be representative of the clients of the bank, with an oversample of individuals that participate in the stock market. Individuals will be asked to participate in an online survey. In the experiment, we will split individuals into 4 groups. Our primary outcome variable will be an investment allocation of 12,500€ between a sustainable and classic fund. In treatment 1, individuals will be informed about their carbon footprint relative to their peer’s carbon footprint (peer measured for individuals similar in income and age). Treatment 2 will get a carbon offset decision, where individuals can allocate 250€ between themselves and atmosfair. Treatment 3 will consider the interaction effect of both treatments.
Intervention Start Date
2023-07-19
Intervention End Date
2023-08-11

Primary Outcomes

Primary Outcomes (end points)
1. Investment allocation of 12,500€ between sustainable and classic fund.
2. Contribution decision (between 0 and 250€) to charitable organization atmosfair.
3. Long-term carbon footprint measured through real life consumption behavior.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
1. Posterior belief about others’ contribution decision.
2. Posterior Investment behavior measured through link to individual broker
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Stage 1
• Sustiainability questions
• Questionnaire on own carbon footprint
• Investment behavior


Stage 2
Treatment Peers Footprint
• Information about own carbon footprint relative to peers (age/income)
• Measure of how well this measure is believed and accepted
Treatment Donation
• Allocation decision of 250€ between oneself and atmosfair
Treatment Peers Footprint + Donation
• All of the above
Treatment Control
• None of the above

Stage 3
• Investment Decision of 12,500€

Stage 4
• Socio-economic and climate change questionnaire
• Demographics
Experimental Design Details
Randomization Method
Randomization done online by a computer
Randomization Unit
Individual participant
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
3000 participants (based on 1% response rate to mailing)
Sample size: planned number of observations
3,000 participants (based on 1% response rate to mailing)
Sample size (or number of clusters) by treatment arms
750 participants in the control condition and 750 in each treatment condition
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Using the standard criteria of alpha = 0.05, beta = 0.20, and assuming the minimum detectable effect size to be somewhere between 17% to 20% of a standard deviation, we will need a sample size of 392-543 participants per condition, respectively.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Joint Ethics Committee of the Faculty of Economics and Business of Goethe University Frankfurt and the Gutenberg School of Management & Economics of the Faculty of Law, Management and Economics of Johannes Gutenberg University Mainz
IRB Approval Date
2023-03-09
IRB Approval Number
N/A
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials