Gender and ESG investing: Same behavior but different motivations

Abstract

How does gender influence ESG (Environmental, Social, Governance) investing behavior? Using survey data from a sample of French investors, we primarily find no significant gender differences in the proportion of ESG funds or stocks held, nor in the willingness to pay to invest in a firm with a high ESG score. However, this lack of significance results from two simultaneous significant indirect gender effects acting in opposite directions. On the one hand, women, compared to men, are found to more strongly endorse specific sustainability criteria related to the fight against discrimination, which, in turn, increases the adoption of socially responsible investing behavior. On the other hand, women's weaker interest in great global environmental challenges results in a decrease in their ESG exposure. These attitudinal differences by men and women align with findings in social psychology literature, which suggests that women's adoption of pro-social/environmental behaviors is typically motivated by communal attitudes (i.e. community-oriented), whereas for men, such behaviors are more often driven by agentic motivations (self-rewarding). A clearer segmentation of ESG investment products, focusing on gender-specific preferences, could improve their adoption by both women and men, and help firms meet MiFID II's requirements by better aligning with investors' preferences.