The study analysed the investment behaviour of high-net-worth individuals (HNWIs) engaging with socially responsible investing (SRI) to examine how reference groups influence their investment decisions.  

Theoretical background 

Socially responsible investing (SRI) integrates environmental, social, and governance (ESG) issues into investment practices. The study found that SRI investors seek to contribute to society while generating financial profits.  

Methodology 

The study analysed 55 qualitative semi-structured interviews with SRI-oriented HNWIs and industry experts. The interviews explored how reference groups influence HNWIs investment behaviour and their views on SRI. Family members of HNWIs and other SRI-oriented HNWIs served as normative and comparative reference groups, respectively.  

Findings 

The study identified two different reference groups, the family and fellow SRI-oriented HNWIs, influencing HNWIs investment behaviour. The family serves as a normative reference group emphasising profit and shaping HNWIs to make financial gains, while fellow SRI-oriented HNWIs serve as a comparative reference group to whom HNWIs compare themselves, thereby subordinating social concerns to financial profits.  

Recommendations  

Given the substantial source of capital that HNWIs represent, understanding their investment behaviours is crucial to mobilising SRI capital for sustainable development. To improve the adoption of SRI, firms should raise awareness of investment options, stressing the financial benefits of SRI in addition to its social benefits. Also, make use of comparative reference groups like fellow SRI-oriented HNWIs to provide HNWIs with role models, improving their understanding of the benefits of SRI investments.

ESG issues

The study examined how SRI investors view and address ESG issues in their investment decisions. It found that investors see SRI as an investment vehicle to contribute to society and generate financial profits. Financial gain is emphasised, which highlights the importance of profitability to enable the adoption of SRI.  

Limitations

The study acknowledges that the sample size may not be representative of all HNWIs, and further analysis is required to confirm its findings.