Achieving ambitious climate mitigation goals require more low-carbon investments to fill the “green investment gap”. Beyond public funds, what can private retail investors do to support the transition to a low-carbon economy? What type of sustainable financial instruments could fit the sustainable finance needs of Austria? And what challenges remain?

In a study commissioned by the Austrian Ministry for Climate Action, Irene Monasterolo and Adrian von Jagow analyzed the Austrian sustainable retail investors' preferences and the landscape of sustainable finance instruments that could be deployed. The full study can be downloaded via this link.

The study benefited from an extensive review of the literature and interviews with business, policy and finance stakeholders. The commissioned project also involved the supervision of a team of students as part of the Sustainability Challenge, an interdisciplinary and service-oriented master's course. The students from WU, University of Vienna, BOKU and Technical University of Vienna contributed to the study's research base and created two fact sheets on sustainable finance for retail investors and town mayors.

The study addresses three questions: 1) Who are Austrian retail investors and which financial instruments do they demand? 2) Which financial instruments may be called "sustainable" in the context of climate mitigation? And 3) which sustainable financial instrument has the most potential to increase retail investors' sustainable investment share?

Results show that while sustainable finance products are increasingly attractive for small investors, their contribution to effective climate mitigation and adaptation requires further analysis. The preferences of Austrian retail investors, who are risk-averse and profit-agnostic, mean that traditional financial products such as savings accounts are still in high demand. Thus, banks still play a major role in ensuring that novel products take into account the conservative investment profile. Finally, on the supply side, a growing corporate green bond market could create new opportunities for retail investors.

The full study can be downloaded via this link.
Click on the following links to access the sustainable finance fact sheets for retail investors and municipalities and town mayors.