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Bennington College

Publication Date

Spring 2020

Program Name

Switzerland: Banking, Finance, and Social Responsibility

Abstract

Remarking a discrepancy in the statistics of a growing influence of impact investment and yet its restrictive inclusion in the financial market has encouraged this inductive research to take an alternative approach to address the impact investment market. In an emic perspective, this study aims to assess the factors motivating individuals and institutions to pursue impact investment. Further, it also investigates some elements that guide the decision making of the investors in this field. The qualitative nature of the research demands exceptional secondary sources and it is rendered more credible with the inclusion of three relevant primary sources. The analysis of the interviews and its assessment vis-a-vis the theories of behavioral finance, we have learned that media narratives and norms are the external factors that motivate people to invest responsibly. However, their personality, attitudes, values, and moral intensity are also inherent factors that encourage them. Their decision making is reliant upon heuristic biases caused by emotional factors such as trust and human relational more than accountability and data. The investors also tend to be oriented towards risk minimization rather than profit maximization, since many do not view impact investment as a traditional investment and neither do they expect to make a profit, nevertheless, it is debatable and depends on the individual. If the first inquiry is to assess the factors that encourage traditional investors to pursue social impact, then the second inquiry about Church investors is an antithetic approach as we evaluate factors that make Church investors consider financial gain alongside the social service. We conclude that it is the recognition of the need to become financially sustainable We can use these findings to restructure the choice architecture we provide to the clients by collecting relevant data to learn more about their values, attitude, and behavior to ease the decision-making process and encourage impact investment.

Disciplines

Behavioral Economics | Business Law, Public Responsibility, and Ethics | Civic and Community Engagement | Ethics in Religion | European Languages and Societies | Finance and Financial Management | Portfolio and Security Analysis | Social and Cultural Anthropology

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