Environmental Concerns and Household Portfolios

Environmental concerns have been on the rise in recent years, influencing both sustainable home improvements and the growth of green financial solutions. Existing research shows how some of the home improvements, such as solar panels, not only contribute to the environment, but yield significant returns, making them a profitable, tangible investment in sustainability. This thesis aims to investigate motives behind the sustainable behaviour of households, by uncovering whether they come from genuine environmental awareness and growing climate concerns, or if they are primarily driven by an “investors mind-set” seeking for profit in every aspect of their life. Research was conducted using Ordinary Least Squares (OLS) and Instrumental Variable (IV) regressions with household survey data. Analysis showed a positive and significant relationship between owning sustainable securities and sustainable homes, indicating that households who tend to make sustainable investment in tangible assets are more prone to having sustainable securities in their portfolios. Although green preferences and higher education levels play a role, the perception of profitability related to these investments remains a crucial factor in making investment decisions.