Greener Pensions, Greener Choices? Linking Investments to Sustainable Behavior

Abstract: This paper investigates the impact of offering sustainable pension options on individuals’ broader sustainability-related consumption behavior. We combine detailed household register data with a natural experiment in which individuals were offered the opportunity to switch to a pension plan with a strong sustainability profile. We find that access to a sustainable pension plan leads to increased sustainable consumption, measured by electric vehicle adoption and vehicle CO2 emissions. These effects are primarily attributed to individuals who do not opt into the sustainable plan. This suggests that providing access to sustainable financial products can generate positive spillover effects on sustainability related behavior.