Understanding human behaviour is critical to all aspects of sustainable investing. If we don't know why people do things, we cannot get them to change. And if they are not going to change, we will need to rethink how we make company business model's sustainable and financially viable.
One of the things that has always fascinated me is why people behave the way they do. I don't mean what they say, but what they do. This distinction is really important, as many people express one view, and then act in a totally different way. Examples are the people who care about the environment, but still buy fast fashion. Or those who say they want healthier food, but actually mostly buy cheap or ultra processed products. Or those who smoke, despite all of the evidence around harm to their health.
This is what is known as the values-behaviour gap. And it's more common than you might think.
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Actual behaviour is often driven by practicalities not principles. And it's why you should retain a degree of scepticism about surveys that say things like ... nearly 90% of Gen X consumers said that they would be willing to spend an extra 10% or more for sustainable products, compared to just over 34% two years ago. Or being even more cynical, you should be careful of accepting survey's that confirm your view of the world.
Plus, from a sustainability perspective, we have the ongoing debate around how do we best communicate the need for action on climate, biodiversity and a just society, in a way that actually drives concrete change rather than apathy, opposition or despair (or lots of talking but no action). This is intrinsically linked to the financial issue above. As we frequently point out, if we cannot finance the sustainability transitions, they will just not happen - at least not at the pace and scale we need.