Green Investing and Political Behavior

A fundamental concern about green investing is that it may crowd out political support for public policy addressing negative externalities. We examine this concern in a preregistered experiment conducted shortly before a real referendum on a climate law with a representative sample of the Swiss population. We find that offering an opportunity to invest in a climate-friendly fund does not reduce individuals’ support for climate regulation, measured as political donations and voting intentions. We replicate the experiment in the UK, obtaining similar results. We conclude that the effect of green investing on individual political behavior is limited.