Given that optimists are healthier, more persistent, and happier, Dr Kent wondered if such framing could influence sustainable financial decisions, especially around responsible investment in green funds.
Together with colleague Dan Daugaard, the academic conducted an experiment involving over 300 seasoned investment professionals. They tested whether framing could influence decisions to divest from fossil fuels. Different messaging frames, including optimistic, social norms, and credible messengers, were used to present the same information. Surprisingly, only the optimistic message, which highlighted the temporary costs of fossil fuel divestment and the permanent environmental benefits, successfully increased green investment. Contrary to previous assumptions, the optimism framing even worked on highly analytical professionals.
The study demonstrated that positively framing divestment decisions boosted responsible investment by 3.6%, suggesting a potential global shift of trillions of dollars in asset allocations. The researchers concluded that optimism, with its focus on future benefits and action, can counteract the inaction typically bred by catastrophic messaging about climate change. This insight emphasizes the role of institutional investors in leading the transition toward sustainable investments by reframing climate communication to highlight the long-term benefits of a greener future.
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