This guide is an essential tool for asset managers and owners to assess clients’ and beneficiaries’ sustainability preferences. With the sustainable finance market gap and variations in sustainability motivations in the EU, elicitation methods serve as guidelines to conduct surveys and (field) experiments.

Methods

The guide provides an introduction to different research questions depending on institutional settings. It defines sustainable finance market gaps and summarises guidelines for conducting surveys and experiments to obtain insights into clients’ and beneficiaries’ sustainability preferences. The report suggests an overview of contextual issues in types of research involving surveys and experiments and how to conduct them.

Findings

The guide presents four case studies with practical recommendations for financial institutions to fasten their adaptation to energy transitions. These include the ways to cater to clients’ and beneficiaries’ needs and profile investment solutions for them and the regulation of DC pension plans. The report highlights how decision-makers respond to differences in preferences, and their moral wiggle room option.

Recommendations

The practitioner’s guide emphasizes financial institutions and policymakers’ role in improving the sustainability attributes of financial products. It encourages the integration of sustainability preferences and prioritization along with security and return. Policymakers must focus on governance programs for adapting financial products to energy transitions. The report also notes that a lack of involvement of beneficiaries holds for strategic decisions, resulting in a significant gap in integrating sustainability preferences.

ESG issues discussed in the report include the sustainable finance market gap, variation in sustainability motivations, differences in sustainability preferences, the governance of DC and DB plans, the role of decision-makers in sustainability preferences, and the integration of sustainability attributes of financial products.

In conclusion, this guide provides a thorough and practical analysis of how to assess sustainability preferences of clients and beneficiaries in different contexts, as well as general guidelines for conducting surveys and (field) experiments. Its practical recommendations for financial institutions and regulators to adapt to energy transitions make it a valuable resource for any finance professional seeking to improve their sustainability offerings.