Nudging ESG Investments via Digital Financial Advising: Evidence From an Investment Game Experiment

Abstract

The influence of financial advisors on retail investors' sustainable investment choices remains surprisingly underexplored, despite their potential to shape investment behavior. This study uses an experimental design to examine how sustainability-related information provided by a digital (simulated) financial advisor affects individual demand for ESG investments. A total of 708 participants from Germany, France, Italy, and Spain were randomly assigned to either a treatment or control group and completed an incentivized allocation task after watching a video of the advisor. We find that advisor-provided sustainability information significantly increases allocations to sustainable assets. The effect is heterogeneous: Financial literacy amplifies the treatment effect, sustainable finance knowledge has a strong direct positive impact independent of the intervention, and sustainability preferences interact with the treatment only at higher allocations. Perceived real-world impact emerges as a key mediating channel. These results offer important insights for financial advisory practice and investor education policies.