Sustainable Finance Literacy and the Determinants of Sustainable Investing

This paper introduces the concept of sustainable finance literacy. We survey a large sample of Swiss households to measure sustainable finance literacy and sustainable finance awareness. To this end, we use multiple-choice questions and a novel approach based on open-ended questions and natural language processing. We find that Swiss households, which are generally highly financially literate by international standards, exhibit low levels of sustainable financial literacy and awareness. Moreover, despite its low level, knowledge about sustainable finance is a significant factor in the ownership of sustainable products. Therefore, our results show an urgent need to create transparent regulatory standards and strengthen information campaigns about sustainable financial products.