Green preference, green investment

Gao, Zhenyu; Luo, Yan; Tian, Shu; Yang, Hao
Wo king Pape
G een p e e ence, g een in es men
ADB Economics Wo king Pape Se ies, No. 722
P o ided in Coope a ion wi h:
Asian De elopmen Bank (ADB), Manila
Sugges ed Ci a ion: Gao, Zhenyu; Luo, Yan; Tian, Shu; Yang, Hao (2024) : G een p e e ence, g een
in es men , ADB Economics Wo king Pape Se ies, No. 722, Asian De elopmen Bank (ADB), Manila,
h ps://doi.o g/10.22617/WPS240238-2
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ASIAN DEVELOPMENT BANK
ASIAN DEVELOPMENT BANK
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GREEN PREFERENCE,
GREEN INVESTMENT
Zhenyu Gao, Yan Luo, Shu Tian, and Hao Yang
ADB ECONOMICS
WORKING PAPER SERIES
NO. 722
Ap il 2024
G een P e e ence, G een In es men
This pape examines whe he indi idual in es o s’ g een p e e ence will be e lec ed in hei in es men
decisions. I p o ides compelling e idence ha indi iduals wi h s onge g een p e e ence in es mo e
in g een mu ual unds, in luenced by conce ns o e he physical and egula o y isks o clima e change.
I sugges s ha his beha io is no d i en by inancial incen i es as p e e ence- ela ed in es men s
may no always lead o inancial gains om ading.
Abou he Asian De elopmen Bank
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loans, equi y in es men s, gua an ees, g an s, and echnical assis ance.
ASIAN DEVELOPMENT BANK
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ADB Economics Wo king Pape Se ies
G een P e e ence, G een In es men
Zhenyu Gao, Yan Luo, Shu Tian, and Hao Yang
No. 722 | Ap il 2024
Zhenyu Gao (gaozhenyu@ba .cuhk.edu.hk) is an
associa e p o esso a Chinese Uni e si y o Hong Kong.
Yan Luo (luoyan@ udan.edu.cn) is a p o esso and
Hao Yang ([email p o ec ed]) is a PhD
candida e a Fudan Uni e si y. Shu Tian (s ian@adb.
o g) is a senio economis a he Economic Resea ch
and De elopmen Impac Depa men , Asian
De elopmen Bank.
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ABSTRACT
Based on Alibaba’s enowned “g een” ini ia i e, he An Fo es p og am, we de elop a
no el measu e o e eal an indi idual in es o ’s nonpecunia y g een p e e ence and link
i o an indi idual’s in es men ac ions. We p esen compelling e idence ha suppo s
non inancial incen i es o in es ing in g een mu ual unds while di es ing om “b own”
unds. Conce ns o e clima e physical and egula o y isks u he ein o ce his in luence.
Indi iduals’ g een p e e ences do no lead o inancial gains om ading. Mo eo e , we
mi iga e he endogenei y issue by employing he de elopmen o a local subway ne wo k
as a sou ce o a ia ions in g een p e e ences.
Keywo ds: nonpecunia y p e e ence, e ealed p e e ence, sus ainable inance, FinTech
JEL codes: G11, G50, Q55
______________________
This pape was p e iously dis ibu ed unde he i le “Clima e Risk Awa eness and Re ail T ading.” We a e
g a e ul o Abdul Abiad, Chanik Jo, Wenhao Li, Wenxi Jiang, Paolo Sodini, Leilei Song, Denis Sosyu a, Wei
Xiong, An hony Zhang, and pa icipan s a a 2022 Asian De elopmen Bank wo kshop, Xiamen Uni e si y
semina , Deakin Uni e si y semina , and 2023 Asian Economic De elopmen Con e ence o help ul
commen s and discussions. All emaining e o s a e ou s. The au ho s acknowledge and app ecia e suppo
om he Digi al Finance Open Resea ch Pla o m (www.d o .o g.cn). All da a a e sampled, desensi ized,
and s o ed on he An Open Resea ch Labo a o y in an An G oup En i onmen , which is only emo ely
accessible o empi ical analysis. Due o leng h limi s o ADB wo king pape se ies, a mo e comple e e sion
o his wo king pape wi h addi ional esul s on es s add essing con ounding ac o s and sensi i i y issues
can be accessed a SSRN: h ps://ss n.com/abs ac =4655538.

1. In oduc ion
In he p esiden ial add ess a he 2023 Ame ican Finance Associa ion (AFA) Lau a S a ks
highligh s he impo ance o unde s anding he mo i a ions behind sus ainable inance,
pa icula ly he dis inc ion be ween “ alue” e sus “ alues” mo i a ions (S a ks 2023).
Ne e heless, un a eling indi iduals’ mo i es o in es men s poses wo majo challenges.
Fi s , i is di icul o measu e indi iduals’ nonpecunia y p e e ences owa d sus ainabili y
and di e en ia e hem om hei inancial conside a ions. Second, i is challenging o
s udy how in es o s’ “g een” p e e ences shape hei in es men choices.
In his pape , we ackle hese challenges by u ilizing a e ealed p e e ence me hodology
(Samuelson 1938, 1948) and in oducing a no el p oxy ha un eils nonpecunia y
p e e ences o sus ainabili y among e ail in es o s. We hen map his p oxy o hese
in es o s’ in es men decisions. This app oach aligns wi h he heo e ical amewo k
p esen ed by Pás o , S ambaugh, and Taylo (2021), who unde sco e he c ucial ole o
changes in sus ainabili y p e e ences in d i ing in es o s’ demand o g een asse s and
subsequen ly impac ing asse p ices, especially du ing ecen pe iods o heigh ened
public awa eness ega ding clima e and en i onmen al issues. Wi h ou p oxy, we can
e ec i ely ack dynamics o indi iduals’ g een as es and empi ically examine he
in luence o hei indi idual en i onmen al p e e ences on hei g een in es men s.
Ou p oxy o nonpecunia y p e e ences o g eenness is based on he An Fo es
p og am, a popula g een ini ia i e in he People’s Republic o China (PRC). This p og am
won he Uni ed Na ions (UN) Champions o he Ea h awa d in 2019, which is he UN’s
lagship global en i onmen al hono (UNEP 2019). Ope a ing unde he FinTech gian An
G oup, an a ilia e o Alibaba, An Fo es aims o p omo e sus ainable p ac ices among
indi iduals by encou aging hem o educe hei ca bon oo p in and p o ec he
en i onmen in hei daily li es. This p og am is in eg a ed in o he Alipay app, he PRC’s
la ges hi d-pa y mobile and online paymen pla o m. I acks use s’ daily eco- iendly
ac i i ies, such as using public anspo a ion o op ing ou o single-use cu le y o ood
deli e ies, o p omo e hei g een li es yles. Use s can ea n “g een ene gy poin s” o
hese ac ions, and once hey each a ce ain numbe o poin s, he An Fo es p og am
2
plan s a ee on hei behal and p o ides eal- ime sa elli e images o hei ees.
Impo an ly, g een ene gy poin s canno be exchanged o inancial ewa ds, he e o e he
An Fo es P og am e eals an indi idual’s nonpecunia y p e e ence o en i onmen ally
iendly p ac ices.
We hen link hese An Fo es use s’ g een p o iles o hei in es men po olios. Since
2014, he An G oup o e ed mu ual und dis ibu ion se ices h ough i s An Fo une
p og am, which allows in es o s o easily in es in almos all mu ual unds a ailable in he
PRC. Acco ding o he IPO p ospec us o he An G oup, i is he la ges online in es men
se ices pla o m in he PRC, wi h a o al o CNY4,099 billion in asse s unde
managemen ma ched and dis ibu ed as o 30 June 2020.
We andomly selec a sample o 200,000 e ail in es o s who bo h engage in he An
Fo es p og am and ade on he An Fo une pla o m ia he Alipay app. Ou sample
pe iod spans om Oc obe 2019 o Sep embe 2021, and we ob ain mon hly mu ual und
ading and holding da a o hese in es o s om he An G oup, along wi h da a on hei
An Fo es g een ene gy poin s, as well as in o ma ion abou hei loca ion, gende , and
age. Addi ionally, we ob ained in o ma ion on he En i onmen al (E) a ings o he mu ual
unds om WIND, a widely used inancial da abase in he PRC.
Ou baseline esul s demons a e ha e ail in es o s end o a o mu ual unds wi h
highe E-sco es i hey ea n mo e g een ene gy poin s. When we classi y he op 20
pe cen o unds as g een unds and he bo om 20% unds as “b own” unds based on
hei E-sco es, we obse e ha in es o s who collec mo e g een ene gy poin s would
in es in g een unds and di es om b own unds. These esul s indica e ha in es o s
a e mo e inclined o choose g een po olios when hei non inancial p e e ences o eco-
iendliness a e posi i ely a ec ed.
A c ucial conce n is ha indi iduals may in es in g een unds no solely based on hei
nonpecunia y p e e ences. The supe io pe o mance o g een unds migh a ac
in es o s, po en ially con ounding ou esul s. To mi iga e his conce n, we conduc ou
empi ical analysis a he in es o - und- ime le el and inco po a e und- ime ixed e ec s
in o all ou eg essions. This app oach enables us o accoun o he ime- a ying
3
pe o mance o unds, such as e u ns and isks, as well as o he unobse able
cha ac e is ics ha migh in luence in es men decisions due o in es o s’ inancial
conside a ions. Fu he mo e, we include in es o ixed e ec s o con ol o indi idual
cha ac e is ics and ocus on he p e e ence dynamics wi hin in es o s a he han ac oss
in es o s. By including hese ixed e ec s, we can isola e he impac o changing
sus ainabili y p e e ences in d i ing in es o s’ demand o g een unds.
Physical and egula o y isks a e ega ded as he p ima y clima e isks (S oebel and
Wu gle 2021; Philipp, Sau ne , and S a ks 2020). In his ligh , we u he in es iga e he
in luence o g een p e e ences in shaping he g een po olios o e ail in es o s who ha e
a ying exposu es o he physical and egula o y impac s o clima e change. To cap u e
shocks o in es o s’ physical clima e conce ns, we u ilize abno mal local empe a u e,
ollowing he app oach o Choi, Gao, and Jiang (2020). Ou analysis indica es ha he
ansi ion om g een p e e ence o g een in es men is mo e p onounced o e ail
in es o s esiding in ci ies exposed o abno mally high empe a u es.
Regula o y isks ha e a simila e ec . We le e age he PRC’s p oposi ion o i s Dual
Ca bon Ta ge s (DCT) o cap u e a ime-se ies shock o clima e change awa eness o
in es o s ela ed o egula o y isks. We ind ha e ail in es o s who ha e ea ned mo e
g een ene gy poin s end o inc ease hei po olio exposu e o g een mu ual unds
ollowing he DCT. This p o ides u he e idence ha clima e and en i onmen al
egula ions s eng hen he connec ion be ween g een p e e ences and in es men s,
highligh ing he in luence o egula o y isks on in es o beha io .
To u he alida e he nonpecunia y mo i es o e ail in es o s o in es in g een unds,
we examine whe he he ne buying o g een unds upon ea ning mo e g een ene gy
poin s leads o ou pe o mance. Ou analysis indica es ha he ne pu chase o unds wi h
highe E-sco es in esponse o a posi i e shock o hei nonpecunia y p e e ences does
no gene a e signi ican ly highe e u ns o e 1-, 3-, 6-, and 12-mon h ho izons. This again
unde sco es he ole o non inancial conside a ions in g een in es men .
Las , we pe o m se e al obus ness and sensi i i y es s. While he inclusion o und- ime
ixed e ec s and he non- esul s o ou pe o mance sugges ha inancial conside a ions
4
may no con ound he nonpecunia y mo i es o g een in es men , i is impo an o
acknowledge ha he e could s ill be unobse able a iables ha we ha e no accoun ed
o . Fo ins ance, local economic shocks could impac bo h indi iduals’ en i onmen ally
iendly ac ions in hei daily li es and hei in es men decisions. To mi iga e he
endogenei y issue, we de elop an iden i ica ion s a egy based on he de elopmen o a
local subway ne wo k. This app oach employs a ia ions in g een ene gy poin s
accumula ion h ough low-ca bon o low-ene gy consump ion modes o a el. The
de elopmen o a subway ne wo k p o ides indi iduals wi h al e na i e a el op ions,
which could po en ially educe ca bon emissions by encou aging he use o public
anspo a ion. Howe e , i does no di ec ly a ec hei in es men choices be ween
g een and b own unds. By u ilizing he de elopmen o local subway ne wo ks as an
ins umen al a iable, we ind ha esiden s in co esponding ci ies a e mo e likely o
amass mo e g een ene gy poin s h ough low-ca bon and low-ene gy g een a els. The
ins umen ed g een ene gy poin s u he inc ease hei holding wi h g een unds,
ensu ing he causal e ec o he shock o indi idual g een p e e ences on hei g een
in es men beha io s.
Mo eo e , we ind ou esul s a e pa icula ly p onounced o young in es o s and
esiden s in he ci ies acing highe le els o ai pollu ion. Ou esul s a e also obus using
an al e na i e ex ual-based measu e o iden i y g een unds, a e we exclude he sample
om ci ies du ing he co ona i us disease (COVID-19) pandemic lockdown pe iods, when
we conside a subsample o indi iduals who edeem g een ene gy poin s o ee-plan ing,
when we adop al e na i e e ail ading measu es, and when we u ilize cumula i e g een
ene gy poin s.
O e all, ou s udy p o ides compelling e idence o he nonpecunia y mo i a ions behind
g een in es men . We de elop a no el me ic ha imely and p ecisely e eals indi iduals’
nonpecunia y p e e ences o emb acing en i onmen al sus ainabili y and link i o hei
in es men po olios. We mi iga e he endogenei y conce ns by in oducing a new
ins umen al a iable o iden i y he ole o non inancial mo i es in d i ing in es men
decisions. We ind ha bo h clima e physical and egula o y isk conce ns ein o ce he
11
In Ap il 2015, he An G oup acqui ed Shumi pla o m, he mu ual und dis ibu ion license
o which allowed he g oup o en e he pla o m business. Acco ding o he IPO
p ospec us o he An G oup, by he end o June 2020, i had become he la ges online
in es men se ices pla o m in he PRC by asse s unde managemen ma ched and
dis ibu ed h ough i s pla o m, which o aled CNY4.1 illion. I has pa ne ed wi h
app oxima ely 170 asse manage s, including he as majo i y o mu ual und companies
as well as leading insu e s, banks, and secu i ies companies in he PRC. Such a wide
pa ne ship allows he An G oup o o e mo e han 6,000 p oduc s h ough i s pla o m,
co e ing ixed income, equi ies, and balanced mu ual unds.
In 2021, he Asse Managemen Associa ion o China s a ed o publicize he non-money
ma ke mu ual und dis ibu ion size by each dis ibu ion channel—including banks,
b oke age i ms, and independen ech and FinTech pla o ms, among o he s. The An
G oup anked i s on he lis a he end o he i s qua e o 2021 wi h a dis ibu ion size
o CNY890.1 billion. I main ained i s op posi ion and eached a dis ibu ion size o
CNY1.20 illion by Sep embe 2021, which coincides wi h he end o ou sample pe iod,
when i su passed he second channel (China Me chan s Bank) by a ound 40%, and he
hi d channel (Tian ian Fund Dis ibu ion) by o e 100%.1
4. Da a and Measu es
This s udy was conduc ed by he An Open Resea ch Labo a o y in a emo e ope a ing
in e ace o An G oup En i onmen .2 All da a we e sampled and desensi ized, and
analyzed by he An Open Resea ch Labo a o y. The labo a o y is a sandbox en i onmen
whe e he au ho s emo ely conduc empi ical analysis and indi idual obse a ions a e
in isible. The main eg ession a iables include basic a iables, in es men a iables,
and consump ion a iables. We combine da a om mul iple sou ces. Ou sample pe iod
spans om Oc obe 2019 o Sep embe 2021. We andomly selec 200,000 e ail
in es o s, who ha e aded a leas once du ing his 24-mon h sample pe iod, om he
online mu ual und dis ibu ion pla o m unde he An G oup (i.e., An Fo une). We add
1 Asse Managemen Associa ion o China. Fund Sales Indus y Da a.
h ps://www.amac.o g.cn/ esea chs a is ics/da as a is ics/ undsalesindus yda a/.
2 See h ps://www.deo .o g.cn/labs o e/labo a o y.

12
he ading equi emen o assu e ha non- ade s a e excluded om his s udy. The
numbe o unique non-money ma ke unds aded by in es o s in his ini ial sample is
7,744, which is compa ible wi h he An G oup’s disclosu e in i s IPO p ospec us ha i s
mu ual und dis ibu ion pla o m o e ed mo e han 6,000 p oduc s o use s a he end o
June 2020. And acco ding o he Asse Managemen Associa ion o China, he a e age
numbe o non-money ma ke unds du ing ou sample pe iod is a ound 7,217. 3
Collec i ely, hese s a is ics con i m ha (i) he An Fo une co e ed almos he en i e
uni e se o mu ual unds in he PRC a he ime o ou s udy, and (ii) ou sample in es o s
could ade a wide ange o unds ha a e ep esen a i e o he whole mu ual und ma ke .
To quan i y a und’s g eenness, we u ilize he E (en i onmen al pe o mance) sco es
p o ided by Wind, a widely used inancial da abase in he PRC, which o e s he mos
ex ensi e co e age o E-sco es o mu ual unds. Ou me hodology esul s in a o al o
3,087,120 ades du ing he sample pe iod, encompassing 4,414 unique mu ual unds
ha ha e been assigned E-sco es by Wind. Among hese unds, 3,053 a e mixed unds,
817 a e index unds, 543 a e equi y unds, and 1 is bond und. (Bond unds ypically do
no ecei e E-sco es as pa o hei e alua ion.)
In addi ion, we collec sample in es o s’ demog aphic in o ma ion—such as age, gende ,
and loca ion— om he An Fo une pla o m. Fo each sample in es o , we also ob ain
he da a om An Fo es , including he mon hly g een ene gy poin s ea ned and
edeemed o en i onmen al p o ec ion ini ia i es (e.g., ee-plan ing).
Fo each mu ual und aded by ou sample in es o s du ing he sample pe iod, we ob ain
addi ional in o ma ion om Wind, including he und’s mon hly e u ns.
4.1 G een Ene gy Poin s
Fo each e ail in es o i in mon h , we ob ain he o al g een ene gy poin s g an ed o
hem o pa icipa ing in low-ca bon ac i i ies. We ake he loga i hm o one plus he o al
3 The numbe o non-money ma ke unds was 5,898 a he end o Sep embe 2019 and 8,536 a he end
o Sep embe 2021. The da a can be ound a
h ps://www.amac.o g.cn/ esea chs a is ics/da as a is ics/mu ual undindus yda a/.
13
g een ene gy poin s ea ned by in es o i in mon h , and deno e i as G eenPoin i . We
expec an in es o wi h a highe G eenPoin i o a ha e g ea e g een p e e ence.
As men ioned in 2.1, he e a e 40 ways o indi iduals o ea n g een ene gy poin s du ing
ou sample pe iod, which could be classi ied in o i e majo ca ego ies. Fo each in es o ,
we ob ain no only he mon hly o al g een ene gy poin s ea ned, bu also he poin s
ea ned unde each o he i e ca ego ies.
In he obus ness check, we cons uc an al e na i e measu e o sample in es o s’ g een
p e e ence, Cum_G eenPoin i , which is he cumula i e g een ene gy poin s ha in es o
i has ea ned om he beginning o he sample pe iod (Oc obe 2019) o he end o mon h
. While G eenPoin i cap u es an in es o ’s g een p e e ence condi ional on he
pa icipa ion in daily eco- iendly ac i i ies in mon h , Cum_G eenPoin i is cons uc ed
condi ional on he pa icipa ion o e a longe pe iod. We also se a dummy a iable,
Ea lyUse i, , o be one o in es o i i she has joined he An Fo es p og am o a pe iod
longe han he sample median, and ze o o he wise.
4.2 Re ail T ading
Fo each e ail in es o i in mon h , we calcula e he ne pu chase o each sample mu ual
und, which equals he di e ence be ween he pu chase and sales alue o he und
scaled by he sum o he wo alues and exp essed as a pe cen age:
Ne Buyi,j, = (BuyValuei,j, - SellValuei,j, ) / (BuyValuei,j, + SellValuei,j, ) × 100%. (1)
The a iable Ne Buyi,j, con eys in o ma ion abou in es o i’s ac i e ading, and a highe
alue o he a iable indica es in es o i’s g ea e in es men alloca ion o mu ual und j
in mon h .
Fo he obus ness checks, we cons uc wo al e na i e measu es o cap u e in es o i’s
ac i e ading o und j, Ne Buy_Al 1i,j, and Ne Buy_Al 2i,j, , using al e na i e denomina o s.
Fo Ne Buy_Al 1i,j, , we eplace he scale in equa ion (1) wi h in es o i’s holdings o und
j a he end o mon h -1. The scale o Ne Buy_ Al 2i,j, is he alue o he o al und
po olio holdings o in es o i a he end o mon h -1.
14
4.3 Mu ual Funds’ En i onmen al Pe o mance
Fo each mu ual und aded by sample in es o s, we ob ain i s E-sco e om Wind, which
is eleased on a semiannual basis. The E-sco e speci ically measu es a und’s
en i onmen al pe o mance, wi h a highe alue indica ing be e pe o mance.
I is plausible ha e ail in es o s a e no sophis ica ed enough o ha e in o ma ion on he
speci ic alue o he E-sco e o each und hey ade. The e o e, we se wo dummies o
cap u e he salien ea u es o a und’s en i onmen al pe o mance: E-Top20%j, and E-
Bo 20%j, . E-Top20%j, (E-Bo 20%j, ) equals one o und j i i s E-sco e is in he op (bo om)
20 h pe cen ile in he Wind und uni e se, and ze o o he wise. Al hough a e ail in es o
may no know he exac alue o a und’s E-so e, she is likely o know whe he a und is
posi ioned mo e owa d g een (E-Top20%j, = 1) o b own (E-Bo 20%j, = 1) in he
en i onmen al pe o mance spec um.
The abo emen ioned en i onmen al pe o mance measu es a e all cons uc ed based on
he en i onmen al sco e assigned o each und by Wind. Howe e , i is possible ha
indi idual in es o s may no be awa e o o pay su icien a en ion o he en i onmen al
a ing. We he e o e p opose an addi ional se o en i onmen al pe o mance measu es
by conduc ing ex ual analysis o he in es men philosophy desc ip ions o each und.
This al e na i e me hodology allows us o e ec i ely cap u e quali a i e in o ma ion
pe aining o he en i onmen al pe o mance o unds.
The in es men philosophy sec ion o a und in oduces i s in es men a ge s, in es men
p inciples, and s a egies used o achie e i s in es men goals. As he in es men
philosophy sec ion summa izes he impo an aspec s o a und, in addi ion o i s pas
pe o mance which is desc ibed sepa a ely, i is p ominen ly ea u ed on he An Fo une
app, posi ioned jus below he in oduc ion o he und manage . The con en is exce p ed
om he und aising epo . The posi ion o his sec ion on he app ensu es easy
accessibili y o in es o s o ead and comp ehend.
Based on he in es men philosophy sec ion o each mu ual und, we se a dummy
a iable, E-Fundj, which equals one o unds ha ha e e e enced he wo d “en i onmen ”
15
in his sec ion, and ze o o he wise. Fo each und, we also ally he equency o
occu ences o “en i onmen ” in he in es men philosophy sec ion, and hen scale i by
he leng h o he sec ion. This no malized coun is deno ed as E-Coun j. Funds ha
discuss en i onmen al issues in hei in es men philosophy sec ion a e a guably
demons a ing a heigh ened ocus on hese issues. Rela i e o hei coun e pa s, such
unds a e mo e likely o ake in es men a ge s’ en i onmen al pe o mance in o
conside a ion in cons uc ing hei po olios. We he e o e expec a non-ze o E-Fundj and
a highe E-Coun j o be indica i e o unds ha a e g eene . To pe o m placebo es s, we
also cons uc a a iable S-Fundj (G-Fundj), which equals one i he wo d “social” (o
“go e nance”) is men ioned in he und’s in es men philosophy sec ion, and ze o
o he wise. Simila ly, S-Coun j (G-Coun j) is cons uc ed based on he scaled coun o
“social” (o “go e nance”) in he in es men philosophy sec ion.
To u he isola e he g een ea u e o unds, we also iden i y g een unds using a mo e
s ingen equi emen . We se E
⊥
-Fundj o be one only o unds ha men ion “en i onmen ”
exclusi ely in hei in es men philosophy sec ion, wi hou he men ion o “social” o
“go e nance.” Fo unds wi h a non-ze o E
⊥
-Fundj, we u he calcula e he no malized
equency o occu ences o “en i onmen ” in i s in es men philosophy, in a simila spi i
o E-Coun j, which is deno ed as E
⊥
-Coun j. E
⊥
-Coun j is au oma ically se o be ze o o
unds wi h a E
⊥
-Fundj ha equals ze o. By analogy, S
⊥
-Fundj, S
⊥
-Coun j, G
⊥
-Fundj, and
G
⊥
-Coun j a e cons uc ed o placebo es s.
4.4 Physical Impac s o Clima e Change
Choi, Gao, and Jiang (2020) demons a e ha in es o s e ise hei belie s abou clima e
change upwa d and di es ca bon-in ensi e s ocks a e expe iencing wa me - han-usual
empe a u es. We ollow hei s udy o use abno mal local empe a u e o cap u e shocks
o in es o s’ g een p e e ence b ough by heigh ened physical clima e conce ns. We
ob ain ci y-mon h le el his o ical empe a u e da a om China Me eo ological
Adminis a ion, and ollow Choi, Gao, and Jiang (2020) o cons uc an abno mal
empe a u e measu e, AbTmpi, , which is he empe a u e o he ci y whe e in es o i
esides in mon h minus he ci y’s a e age empe a u e in he same mon h o he yea
16
o e he pas 10 yea s. 4 A highe AbTmpi, is indica i e o wa me - han-usual local
empe a u e.
4.5 Regula o y Impac s o Clima e Change
We cap u e he e ec o egula o y impac o clima e change using he PRC’s p oposi ion
o i s DCT. The exis ing li e a u e has sugges ed ha go e nmen al en i onmen al
commi men is likely o aise in es o s’ clima e- isk awa eness. Fo ins ance, Sel ze ,
S a ks, and Zhu (2022) and Bol on and Kacpe czyk (2021) use he Pa is Ag eemen as
a shock o in es o s’ awa eness abou ca bon isk, and show ha he ca bon p emium
inc eases ollowing he Pa is Ag eemen . In a simila spi i , we expec he PRC’s
p oposi ion o i s DCT o boos Chinese in es o s’ clima e- isk awa eness.
The DCT, he a ge s o achie ing a ca bon peak by 2030 and ca bon neu ali y by 2060,
was ini ially p oposed a he 75 h UN Gene al Assembly in Sep embe 2020. Howe e ,
he de ailed measu es and ac ion plans we e un eiled in he annual plena y session o
he Na ional People’s Cong ess, he op legisla u e o he PRC, in Ma ch 2021. The igu e
below plo s he mon hly sea ch olume o he e m “ca bon neu ali y,” he ul ima e goal
ou lined in he PRC’s DTC p oposi ion, on he coun y’s dominan sea ch engine, Baidu.
The sea ch olume o “ca bon neu ali y” was low when he DCT we e ini ially p oposed
in Sep embe 2020 bu su ged in Ma ch 2021 when he de ailed ac ion plans we e
eleased. I sugges s ha he DCT caused much public a en ion only a e he speci ic
measu es and ac ion plans we e announced. Acco dingly, we se Ma ch 2021 o be he
e en mon h and se a dummy a iable Pos o be equal o one o all mon hs a e he
e en mon h.
4 Mo e in o ma ion abou he da a can be ound a h ps://da a.cma.cn.

17
Sea ch Volume o “Ca bon Neu ali y” on Baidu
No es: This igu e plo s he mon hly sea ch olume o “ca bon neu ali y”, he ul ima e goal ou lined in he
People’s Republic o China’s (PRCO p oposi ion o he Dual-Ca bon Ta ge s (DCT) on Baidu, he dominan
sea ch engine in he PRC. The sea ch olume su ges in Ma ch 2021, coinciding wi h he PRC's
announcemen o de ailed measu es and ac ion plans o achie ing DCT du ing he annual plena y session
o he Na ional People's Cong ess, he PRC's op legisla i e body.
Sou ce: Au ho s’ calcula ions.
4.6 T ading Pe o mance
Fo each in es o i’s ading o und j in mon h , we assess he ading pe o mance 1, 3,
6, and 12 mon hs a e he ade. Speci ically, we calcula e in es o i’s ne pu chase, in
alue o und j in mon h , and mul iply i by he und’s e u n in he ollowing pe iods:5
P o i 1Mi,j, = (BuyValuei,j, , - SellValuei,j, ) × Re j, - +1, (2)
whe e P o i 1Mi,j, is he p o i ha in es o i could ob ain one mon h a e he ading o
und j in mon h , BuyValuei,j, and SellValuei,j, a e he alues o he pu chase and sale o
5 Due o he a ailabili y o only 2 yea s o da a on indi idual in es o s’ holdings and ansac ions, we a e
unable o comp ehensi ely ack he dynamics o po olio pe o mance by conside ing he iming o buying
and selling o e an ex ended pe iod. The e o e, we ocus ou analysis on he “buy and hold” pe o mance
o in es o s ac oss a ious ime ho izons. While his app oach p o ides aluable insigh s in o he in es o s’
pe o mance wi hin he gi en ime ame, we acknowledge he limi a ions imposed by he da a a ailabili y.
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
18
he und, espec i ely, and Re j, - +1 is he e u n o und j a 1 mon h a e . We simila ly
calcula e P o i 3Mi,j, , P o i 6Mi,j, , and P o i 12Mi,j, ,, by eplacing Re j, - +1 in equa ion (2) wi h
Re j, - +3, Re j, - +6, and Re j, - +12, espec i ely, which ep esen he p o i s ha he in es o
could ob ain 3, 6, and 12 mon hs a e he ading o und j in mon h .
We also assess in es o s’ ading pe o mance based on he abno mal e u ns o unds
being aded. Speci ically, we eplace Re j, - +n in equa ion (2) wi h he abno mal e u n o
und j, which is calcula ed as i s aw e u n o e he n-mon h pe iod in excess o i s sec o
e u n du ing he concu en pe iod. The abno mal e u n ha in es o i ea ns 1, 3, 6, and
12 mon hs a e ading und j in mon h is deno ed as AbP o i 1Mi,j, , AbP o i 3Mi,j, ,
P o i 6Mi,j, , and P o i 12Mi,j, ,,, espec i ely.
In in es iga ing he ading pe o mance o in es o i o und j in mon h , we con ol o
he his o ical ading pe o mance in eg essions, which e lec s he ading abili y and
migh a ec ou esul s. The in es o ’s his o ical ading pe o mance, o In es o _P o i i, ,
is he cumula ed p o i ha in es o i has ea ned by ading mu ual unds on he An
Fo une pla o m om he beginning o he sample pe iod un il he end o mon h .
4.7 Ins umen s Based on Local Subway De elopmen
We p opose an ins umen al a iable o g een ene gy poin s ea ned by an indi idual
based on he de elopmen o a local subway ne wo k. I is na u al o expec ha an
indi idual li ing in ci ies wi h mo e de eloped subway ne wo ks will be mo e awa e o and
mo e willing o adop he low-ca bon a el op ion, which cons i u es an impo an pa o
he low-ca bon li es yle choices.
In cons uc ing he ins umen al a iables, SubwayS a ioni, and SubwayKmsi, , we
calcula e he a ios o he numbe o subway s a ions and he o al mileages o subways,
espec i ely, in he ci y whe e in es o i esides a he end o mon h , o he ci y’s
popula ion a he end o he p e ious yea . The ins umen s SubwayS a ioni, -1 and
SubwayKmsi, -1 a e expec ed o be posi i ely co ela ed wi h local indi iduals’
G eenPoin si, and G eenT a eli, . A he same ime, hese wo ins umen s a e less likely
19
o be di ec ly associa ed wi h indi iduals’ g een in es men decisions, making hem
sui able ins umen al a iables o he alle ia ion o po en ial endogenei y conce ns.
5. Empi ical Resul s
In his sec ion, we examine whe he an in es o ’s g een ene gy poin s ea ned in he An
Fo es p og am, which is ep esen a i e o he g een p e e ence, would a ec he ne
pu chase o mu ual unds condi ional on he unds’ en i onmen al pe o mance. Table 1
p esen s he summa y s a is ics o ou sample in es o s and unds. The a e age age o
ou sample in es o is 33.9 yea s old, and 44.7% o hem a e emale. The G eenPoin s
o sample e ail in es o s a e ages 6.99 wi h a s anda d de ia ion o 1.93. The a e age
o he en i onmen al pe o mance sco e (E-sco e) o sample mu ual unds is 3.01 wi h a
s anda d de ia ion o 1.98.
Table 1: Summa y S a is ics
Panel A: Main a iables
Va iables
No. Obs.
Mean
S d
Re ail ading
Ne Buy
3,087,120
40.8533
83.4425
Ne Buy_Al 1
5,468,225
8.2217
0.9628
Ne Buy_Al 2
6,204,409
4.2685
32.8742
In es o s’ demog aphic in o ma ion
Female
3,087,120
0.4471
0.4971
Age
3,087,120
33.8928
9.3290
G een ene gy poin s’ a iables
G eenPoin s
3,087,120
6.9947
1.9266
Cum_G eenPoin s
3,087,120
9.5011
2.1836
G eenT a el
3,087,120
6.3534
2.8073
T a elReduc ion
3,087,120
2.3606
2.7929
P&PReduc ion
3,087,120
3.5030
1.8682
Ene gySa ing
3,087,120
0.0577
0.5272
Recycle
3,087,120
0.0552
0.6029
Mu ual unds’ en i onmen al pe o mance
E
3,087,120
3.0084
0.9766
E-Top20%
3,087,120
0.1518
0.3588
E-Bo 20%
3,087,120
0.1872
0.3901
O he a iables
AbTmp
3,087,120
0.5350
1.2606
P o i -1M
3,087,120
–0.5240
1.2114
Con inued on he nex page
20
Panel A: Main a iables
Va iables
No. Obs.
Mean
S d
P o i -3M
3,087,120
0.0096
1.8588
P o i -6M
3,087,120
0.0274
3.0279
P o i -12M
3,087,120
0.0429
4.1385
AbP o i -1M
3,087,120
–0.0046
1.0146
AbP o i -3M
3,087,120
–0.0045
1.4499
AbP o i -6M
3,087,120
–0.0079
2.3295
AbP o i -12M
3,087,120
–0.0017
2.9700
In es o _P o i
3,087,120
6.6780
28.8767
SubwayS a ion
3,087,120
126.6060
146.7259
SubwayKms
3,087,120
195.4650
247.5886
Pollu ed
3,081,662
0.5311
0.4990
Ea lyUse
3,087,120
0.5185
0.4997
Panel B: G eenPoin s o sample in es o s by subg oup
By age
No. Obs.
Mean
S d.
Young (age below median)
1,685,465
7.0608
1.8020
Old (age abo e median)
1,401,655
6.9153
2.0636
By gende
Male
1,706,861
7.1389
1.9139
Female
1,380,259
6.8163
1.9272
By he da e o joining An Fo es
Ea lyUse (joining da e below median)
1,600,974
7.3482
1.4997
La eUse (joining da e abo e median)
1,486,146
6.6140
2.2378
No es: Panel A epo s summa y s a is ics o he main a iables used in he empi ical es s. Panel B p esen s
he dis ibu ion o g een ene gy poin s ea ned by sample in es o s condi ional on age and gende . All
a iables a e de ined in he Appendix Table.
Sou ce: Au ho s’ calcula ions.
5.1 Baseline Tes s
We pe o m he baseline es a he in es o - und-yea -mon h le el, as speci ied below:
Ne Buyi,j, = β0 + β1G eenPoin si, -1 × Ej, -1 + ∑i In es o i + ∑j, Fundj × Time +
ε
i,j, ,
(3)
whe e e ail in es o i’s ne pu chase o und j in mon h is eg essed on he in e ac ion
e m be ween he g een ene gy poin s ha she ea ns in mon h -1 and he E-sco e o und
j. We con ol o bo h in es o and und-yea -mon h ixed e ec s in he es s o isola e he
e ec s o indi idual he e ogenei y o ime- a ying und cha ac e is ics (e.g., und e u ns
and isks). The esul s a e epo ed in Table 2.
27
Table 5: In luence o Clima e Regula o y Risk Shock
(1)
(2)
(3)
Ne Buyi,j,
Ne Buyi,j,
Ne Buyi,j,
G eenPoin s i, -1 × Ej, -1 × Pos
0.3818***
(0.0000)
G eenPoin s i, -1 × Ej, -1
0.0254
(0.5819)
G eenPoin s i, -1 × E-Top20%j, -1×Pos
0.8266***
(0.0000)
G eenPoin s i, -1 × E-Top20%j, -1
-0.0141
(-0.9009)
G eenPoin s i, -1 × E-Bo 20%j, -1 × Pos
-0.3685***
(0.0073)
G eenPoin s i, -1 × E-Bo 20%j, -1
0.0082
(0.9130)
G eenPoin s i, -1 × Pos
-0.4635**
0.6909***
0.9114***
(0.0371)
(0.0000)
(0.0000)
G eenPoin s i, -1
-2.1665***
-2.0910***
-2.0936***
(0.0000)
(0.0000)
(0.0000)
In es o FE
YES
YES
YES
Fund × Time FE
YES
YES
YES
Adj. R2
0.1729
0.1729
0.1728
No. o Obs.
3,087,120
3,087,120
3,087,120
No es: This able examines he in luence o clima e egula o y isk shock, cap u ed by he PRC’s un eiling
in Mach 2021 o i s measu es and ac ion plans o achie e he Dual Ca bon Ta ge s (i.e., ca bon peak by
2030 and ca bon neu ali y by 2060), on he ansla ion o in es o s’ g een p e e ence in o hei ading o
g een unds. The a iable Pos is se o one o pe iods a e Ma ch 2021, and ze o o he wise. The
eg essions a e pe o med a he in es o - und- ime le el, wi h he dependen a iable being in es o i’s ne
pu chase o und j in mon h , as de ined in equa ion (1). G eenPoin s i, -1 e e s o An Fo es g een ene gy
poin s ea ned by in es o i du ing mon h -1, and Ej, -1 is he en i onmen al pe o mance sco e (E-sco e) o
und j p o ided by Wind. The a iables E-Top20%j, -1 and E-Bo 20%j, -1 a e dummies indica ing whe he und
j is in he op o bo om 20 h pe cen ile, espec i ely, o he und uni e se in e ms o i s E-sco e. All a iables
a e de ined in he Appendix Table. In es o ixed e ec s and und- ime ixed e ec s a e con olled. S anda d
e o s a e clus e ed a he und le el. The p- alues a e epo ed in pa en heses. *, **, and *** ep esen
signi icance a 10%, 5%, and 1% le el, espec i ely.
Sou ce: Au ho s’ calcula ions.
5.4 In es men Pe o mance
In all p e ious es s, we ha e con olled und-yea -mon h ixed e ec s o isola e he
in luence o unds’ pas pe o mance on in es o s’ in es men decisions, and g een
ene gy poin s s ill exhibi a s ong and obus in luence on in es o s’ endency o in es in
unds wi h a be e en i onmen al pe o mance. The e idence suppo s ou conjec u e

28
ha nonmone a y mo i es could be d i ing he connec ion be ween e ail in es o s’
p e e ence o g een ini ia i es and hei g een in es men s.
We pe o m addi ional es s o examine he in es men pe o mance o sample e ail
in es o s, condi ional on hei g een p e e ence and he en i onmen al pe o mance o
he unds being aded. I hese in es o s indeed in es in g een unds o nonpecunia y
mo i es, we should obse e no signi ican ly posi i e p o i s ea ned by hese in es o s
a e ading g een unds.
Again, we pe o m in es o - und-mon h le el eg essions. Fo each und j aded by
in es o i in mon h , we calcula e he p o i s he in es o could ea n 1, 3, 6, and 12 mon hs
a e mon h , which a e deno ed as P o i 1Mi,j, , P o i 3Mi,j, , P o i 6Mi,j, , and P o i 12Mi,j, ,,,
espec i ely. We also calcula e he abno mal p o i ha could be ea ned by in es o s in a
simila way—by only conside ing und e u ns in excess o i s sec o e u ns. The
abno mal p o i s measu ed 1, 3, 6, and 12 mon hs a e in es o i’s ading o und j in
mon h a e deno ed as AbP o i 1Mi,j, , AbP o i 3Mi,j, , P o i 6Mi,j, , and P o i 12Mi,j, ,,, espec i ely.
The calcula ion o hese p o i measu es is speci ied in equa ion (2) and desc ibed in de ail
in sec ion 4.6. We pe o m he ollowing eg ession:
P o i i,j, = β0 + β1G eenPoin i, × Ej, -1 + ∑i, In es o i × Yea Mon h + ∑j, Fundj × Time +
ε
i,j, .
(6)
whe e he dependen a iable could be one o he six p o i measu es men ioned abo e,
and he coe icien o in e es is β1. A signi ican ly posi i e β1 would sugges ha in es o
i is ewa ded inancially by in es ing in und j, condi ional on i s en i onmen al
pe o mance, and ice e sa.
The esul s a e epo ed in Table 6. Panels A and B o he able use pos - ading p o i
and pos - ading abno mal p o i as he dependen a iable, espec i ely. The esul s
show ha no ma e which pos - ading in e al is examined o how ading p o i is
measu ed, e ail in es o s do no ea n a signi ican ly posi i e p o i o in es ing in unds
wi h a be e en i onmen al pe o mance. The esul s ende u he suppo o ou
conjec u e ha ou g een p e e ence measu e cons uc ed based on e ail in es o s’ An
29
Fo es g een ene gy poin s is nonpecunia y in na u e and ha i is linked o in es o s’
g een in es men beha io o non inancial mo i es.
Table 6: In es men Pe o mance
Panel A
(1)
(2)
(3)
(4)
P o i 1Mi,j,
P o i 3Mi,j,
P o i 6Mi,j,
P o i 12Mi,j,
G eenPoin s i, -1 ×Ej, -1
0.0010
0.0006
–0.0010
0.0001
(0.2323)
(0.5419)
(0.4882)
(0.9745)
G eenPoin s i, -1
–0.0042*
–0.0072**
–0.0063
–0.0158***
(0.0719)
(0.0259)
(0.1720)
(0.0020)
In es o _P o i i,
–0.0026***
–0.0078***
–0.0062**
–0.0061**
(0.0077)
(0.0002)
(0.0472)
(0.0498)
In es o FE
YES
YES
YES
YES
Fund × Time FE
YES
YES
YES
YES
Adj. R2
–0.0069
–0.0157
–0.0239
–0.0184
No. o Obs.
3,087,120
3,087,120
3,087,120
3,087,120
Panel B
(1)
(2)
(3)
(4)
AbP o i 1Mi,j,
AbP o i 3Mi,j,
AbP o i 6Mi,j,
AbP o i 12Mi,j,
G eenPoin s i, -1 ×Ej, -1
0.0006
–0.0004
–0.0016
0.0010
(0.3913)
(0.5611)
(0.1043)
(0.1834)
G eenPoin s i, -1
–0.0023
–0.0005
0.0026
–0.0042
(0.2425)
(0.8265)
(0.3944)
(0.9880)
In es o _P o i i,
–0.0013*
–0.0016
0.0002
0.0011
(0.0847)
(0.1401)
(0.9336)
(0.4427)
In es o FE
YES
YES
YES
YES
Fund × Time FE
YES
YES
YES
YES
Adj. R2
–0.0104
–0.0241
–0.0303
–0.0283
No. o Obs.
3,087,120
3,087,120
3,087,120
3,087,120
No es: This able assesses he pos - ading pe o mance o in es o s condi ional on hei g een p e e ence
cap u ed by An Fo es g een ene gy poin s G eenPoin s i, -1, and he en i onmen al pe o mance o unds
being aded cap u ed by he E-sco e Ej, -1 . The eg essions a e pe o med a he in es o - und- ime le el.
The dependen a iable P o i 1Mi,j, in column (1) o Panel A is he p o i ha in es o i could ob ain one
mon h a e he ading o und j in mon h , as speci ied in equa ion (2). Simila ly, we assess he p o i s
she could ob ain 3, 6, and 12 mon hs a e he ading, which a e used as he dependen a iables in
columns (2)–(4), espec i ely. In Panel B, he dependen a iables a e he abno mal p o i s ha in es o i
could ob ain 1, 3, 6, and 12 mon hs a e ading und j in mon h , whe e he und’s abno mal e u n is
calcula ed ela i e o he concu en a e age e u n o unds in i s sec o . The a iable Ej, -1 is he mos
ecen ly a ailable en i onmen al pe o mance sco e (E-sco e) o und j p o ided by Wind. In es o _P o i i,
is he cumula ed p o i ha in es o i has ea ned h ough ading mu ual unds on he An Fo une pla o m
by he end o mon h . All a iables a e de ined in he Appendix Table. In es o ixed e ec s and und- ime
ixed e ec s a e con olled. S anda d e o s a e clus e ed a he und le el. The p- alues a e epo ed in
pa en heses. *, **, and *** ep esen signi icance a he 10%, 5%, and 1% le els, espec i ely.
Sou ce: Au ho s’ calcula ions.
30
5.5 Add essing Endogenei y
As discussed in sec ion 4.7, subway de elopmen is closely ela ed wi h local esiden s’
g een a el endency, ye is less likely o di ec ly a ec hei in es men decisions owa d
g een po olios. I is hus a sui able ins umen al a iable o local indi iduals’ g een
ene gy poin s. We use SubwayS a ioni, and SubwayKmsi, , which a e he scaled ci y-le el
numbe o subway s a ions and subway mileage, espec i ely, as ins umen s o local
in es o s’ g een ene gy poin s, G eenPoin si, , and hei poin s speci ically ea ned o
g een a el, G eenT a eli, .
We es ima e he ollowing wo-s age equa ions:
G eenPoin si, (G eenT a eli, ) = β0 + β1SubwayS a ioni, -1 (SubwayKmsi, -1)+ ∑I In es o i +
∑ Time +
ε
i, , (7)
Ne Buyi,j, = β0 + β1P e (G eenPoin si, -1 (G eenT a eli, -1)) × Ej, -1 + ∑i In es o i + ∑j, Fundj
× Time +
ε
i,j, , (8)
whe e P e (G eenPoin i, -1) and P e (G eenT a eli, -1) in equa ion (8) is he p edic ed alue
o in es o i’s G eenPoin s and G eenT a el in mon h -1 es ima ed using equa ion (7).
Table 7 epo s he esul s o he wo-s age eg essions.
Table 7: Local Subway De elopmen as Ins umen al Va iables
Panel A: 1s s age
(1)
G eenpoin i,
(2)
G eenpoin i,
(3)
G eenT a eli,
(4)
G eenT a eli,
SubwayS a ionsi, -1
0.0021***
(0.0000)
SubwayKmsi, -1
0.0012***
(0.0001)
SubwayS a ionsi, -1
0.0032***
(0.0000)
SubwayKmsi, -1
0.0016***
(0.0003)
In es o FE
YES
YES
YES
YES
Time FE
YES
YES
YES
YES
F s a is ic
23.065
14.825
26.446
13.038
Adj. R2
0.7233
0.7233
0.7586
0.7586
No. o Obs.
3,087,120
3,087,120
3,087,120
3,087,120
Con inued on he nex page
31
Panel B: 2nd s age
IV = S a ions
IV = KMs
IV = S a ions
IV = KMs
(1)
Ne Buyi,j,
(2)
Ne Buyi,j,
(3)
Ne Buyi,j,
(4)
Ne Buyi,j,
P e (G eenPoin s
i, -1
)
×
Ej, -1
6.9409***
7.5156***
(0.0020)
(0.0029)
P e (G eenPoin s i, -1)
–21.610
–9.3446***
(0.2450)
(0.6842)
P e (G eenT a el
i, -1
)
×
Ej, -1
4.5356***
5.5920***
(0.0020)
(0.0029)
P e (G eenT a el i, -1)
–14.121
–6.9529
(0.2450)
(0.6842)
In es o FE
YES
YES
YES
YES
Fund × Time FE
YES
YES
YES
YES
Adj. R2
0.1723
0.1723
0.1723
0.1723
No. o Obs.
3,087,120
3,087,120
3,087,120
3,087,120
No es: This able p esen s he indings o es s conduc ed using ins umen al a iables. The wo
ins umen al a iables a e SubwayS a ionsi, -1 and SubwayKmsi, -1, which ep esen he numbe o subway
s a ions and he o al mileages o subways a he end o mon h -1 in he ci y whe e in es o i esides, scaled
by he ci y’s popula ion a he end o he p e ious yea , espec i ely. G eenpoin i, deno es he o al g een
ene gy poin s ha in es o i ea ns in he An Fo es p og am in mon h , and G eenT a eli, is he g een
ene gy poin s she ea ns speci ically o g een a el, one o he i e ca ego ies o daily low-ca bon li es yle
choices in he An Fo es p og am. Panels A and B epo esul s o he i s - and second-s age es s,
espec i ely. In Panel B, he eg essions a e pe o med a he in es o - und- ime le el, wi h he dependen
a iable being in es o i’s ne pu chase o und j in mon h , as de ined in equa ion (1). P e (G eenPoin s i, -
1) in columns (1) and (2) is he p edic ed alue om columns (1) and (2) in Panel A, espec i ely. P e
(G eenT a el i, -1) in columns (3) and (4) is he p edic ed alue om columns (3) and (4) in Panel A,
espec i ely. The a iable Ej, -1 is he mos ecen ly a ailable en i onmen al pe o mance sco e (E-sco e) o
und j p o ided by Wind. All a iables a e de ined in he Appendix Table. In es o ixed e ec s and und-
ime ixed e ec s a e con olled. S anda d e o s a e clus e ed a he und le el. The p- alues a e epo ed
in pa en heses. *, **, and *** ep esen signi icance a he 10%, 5%, and 1% le els, espec i ely.
Sou ce: Au ho s’ calcula ions.
Panel A shows he esul s o he i s -s age eg ession. Ac oss all ou columns, he
ins umen al a iables SubwayS a ionsi, -1 and SubwayKmsi, -1 a e signi ican ly and
posi i ely associa ed wi h G eenPoin si, o G eenT a eli, a he 1% le el. The esul in
column (1) sugges s ha a one s anda d de ia ion inc ease in SubwayS a ioni, -1 would
con ibu e o a 4.4% inc ease in G eenPoin si, ela i e o he sample mean (6.99). The
F-s a is ics ac oss all ou columns a e g ea e han 10, con i ming ha he numbe o
local subway s a ions and subway mileage a e no conside ed weak ins umen s o
G eenPoin s and G eenT a el o local in es o s.
32
Panel B epo s he esul s o he second-s age eg ession. The coe icien on he
in e ac ion e m be ween e ail in es o s’ ins umen ed G eenPoin s o G eenT a el and
und en i onmen al pe o mance is signi ican ly posi i e a he 1% le el ac oss all ou
columns. The esul s ende u he suppo o ou conjec u e ha e ail in es o s’ g een
p e e ence, e ealed h ough hei pa icipa ion in daily eco- iendly ac i i ies, plays a ole
in shaping hei in es men p e e ence.
6. Conclusions
Ou esea ch builds on he success o he An Fo es p og am, a well-known g een
ini ia i e in he PRC. By using a new measu e ha e lec s how indi iduals s eng hen
hei nonpecunia y p e e ences wi h ega d o en i onmen al issues, we map his
measu e o hei in es men decisions. This app oach p o ides compelling e idence o
he non inancial d i e s behind g een in es ing. To add ess he challenge o endogenei y,
we use he de elopmen o a local subway ne wo k as an ins umen al a iable, which
causes a ia ions in he accumula ion o g een ene gy poin s h ough eco- iendly a el.
Ou indings emphasize he s ong impac o non inancial incen i es on g een in es men
decisions, including how indi idual conce ns o e he physical and egula o y isks o
clima e change u he s eng hen hese incen i es. Al hough indi iduals may upda e hei
nonmone a y g een p e e ences, ou esea ch sugges s ha hese upda es may no
necessa ily gene a e inancial gains om ading.

33
Appendix Table: Va iable De ini ions
Va iables
De ini ions
Re ail ading
Ne Buy
i,j,
The di e ence be ween in es o i’s pu chase and sales alue
o und j in mon h scaled by he sum o he wo alues. The
a iable is de ined in equa ion (1) and exp essed in
pe cen age.
Ne Buy_Al 1
i,j,
The di e ence be ween in es o i’s pu chase and sales alue
o und j in mon h scaled by he alue o und j in he po olio
a he end o mon h -1
. The a iable is exp essed as a
pe cen age.
Ne Buy_Al 2
i,j,
The di e ence be ween in es o i’s pu chase and sales alue
o und j in mon h scaled by
he o al alue o he und
po olio a he end o mon h -1. The a iable is exp essed as
a pe cen age.
Re ail in es o s’ demog aphic in o ma ion
Young
i
An indica o ha equals one o e ail in es o s aged below
he sample median (32 yea s) a he beginning o he sample
pe iod, and ze o o he wise.
Age
i
Re ail in es o s’ age a he beginning o he sample pe iod.
Female
i
An indica o ha equals one o emale in es o s and ze o o
male in es o s.
An Fo es p og am- ela ed a iables
G eenPoin
i,
The loga i hm o one plus he o al g een ene gy poin s
ea ned by in es o i in mon h in he An Fo es p og am.
Cum_G eenPoin
i,
The loga i hm o one plus he cumula i e g een ene gy
ea ned by in es o i om he beginning o he sample pe iod
un il he end o mon h .
G eenT a el
i,
The loga i hm o one plus he g een ene gy ea ned by
in es o i unde he “g een a el” ca ego y in he An Fo es
p og am, hough ac i i ies such as a eling by public
anspo a ion and walking.
T a elReduc ion
i,
The loga i hm o one plus he g een ene gy poin s ea ned by
in es o i unde he “ a el educ ion” ca ego y in he An
Fo es p og am, h ough ac i i ies such as using online
se ices.
P&PReduc ion
i,
The loga i hm o one plus he g een ene gy poin s ea ned by
in es o i unde he “pape and plas ic educ ion” ca ego y in
he An Fo es p og am, h ough ac i i ies such as equi ing
no single-use cu le y o ood-deli e y se ices and equi ing
elec onic eceip s ins ead o p in ed copies.
Ene gySa ing
i,
The loga i hm o one plus he g een ene gy poin s ea ned by
in es o i unde he “ene gy sa ing” ca ego y in he An Fo es
p og am, h ough ac i i ies such as pu chasing ene gy-
e icien appliances.
Recycle
i,
The loga i hm o one plus he g een ene gy poin s ea ned by
in es o i unde he “ ecycle” ca ego y in he An Fo es
Con inued on he nex page
34
Va iables
De ini ions
p og am, h ough ac i i ies such as ecycling used clo hes,
cell phones, and appliances.
Ea lyUse
i,
An indica o ha equals one i , by he end o mon h , in es o
i has joined he An Fo es p og am o a pe iod longe han
he sample median, and ze o o he wise.
Mu ual unds’ en i onmen al pe o mance based on a ings
E
j,
The E-sco e, issued by Wind, o und j, condi ional on i s
en i onmen al pe o mance. The sco e is upda ed on a semi-
annual basis.
E-Top20%
j,
A dummy a iable ha equals one i he E-sco e o und j is in
he op 20 h pe cen ile o he und uni e se wi h Wind E-
sco es, and ze o o he wise.
E-Bo 20%
j,
A dummy a iable ha equals one i he E-sco e o und j is in
he bo om 20 h pe cen ile o he und uni e se wi h Wind E-
sco es, and ze o o he wise.
Mu ual unds’ non inancial pe o mance based on ex ual analysis
E-Fund
j
An indica o ha equals one o und j i i men ions
“en i onmen ”
in i s in es men philosophy, which is
exce p ed om i s und aising epo and displayed in he An
Fo une app, and ze o o he wise.
E-Coun
j
The numbe o imes ha “en i onmen ” is men ioned in he
in es men philosophy sec ion o und j displayed in he An
Fo une app, scaled by he leng h o he sec ion.
S-Fund
j
An indica o ha equals one o und j i i men ions “social” in
i s in es men philosophy sec ion displayed in he An Fo une
app, and ze o o he wise.
G-Fund
j
An indica o ha equals one o und j i i men ions
“go e nance” in i s in es men philosophy sec ion displayed
in he An Fo une app, and ze o o he wise.
S-Coun j / G-Coun j
The cons uc ion is analogous o ha o E-Coun j.
E
⊥
-Fund
j
An indica o ha equals one o und j i i men ions
“en i onmen ” in i s in es men philosophy sec ion displayed
in he An Fo une app bu does no men ion “social” o
“go e nance,” and ze o o he wise.
E
⊥
-Coun
j
The numbe o imes ha “en i onmen ” is men ioned in he
in es men philosophy sec ion o und j, scaled by he leng h
o he sec ion, condi ional on E
⊥
-Fundj no being ze o. E
⊥
-
Coun j is se ze o i E
⊥
-Fundj equals ze o.
S
⊥
/G
⊥
-Fundj
The cons uc ion is analogous o ha o E
⊥
-Fundj.
S
⊥
/G
⊥
- Coun j
The cons uc ion is analogous o ha o E
⊥
-Coun j.
Physical- and egula o y-shock- ela ed a iables
AbTmp
i,
The abno mal empe a u e measu ed ollowing Choi, Gao,
and Jiang (2020), which equals he empe a u e o he ci y
whe e in es o i esides in mon h minus he ci y’s a e age
empe a u e in he same mon h o he yea o e he pas 10
yea s.
Pos
A dummy a iable ha equals one o mon hs a e Ma ch
2021, and ze o o he wise. In Ma ch 2021, he PRC un eiled
Con inued on he nex page
35
Va iables
De ini ions
i s measu es and ac ion plans o achie e he Dual Ca bon
Ta ge s in he annual plena y session o he Na ional People's
Cong ess, he op legisla u e in he PRC.
Pos - ading pe o mance
P o i 1M
i,j,
/
P o i 3Mi,j,
/P o i 6Mi,j, /
P o i 12Mi,j,
P o i 1M
i,j,
is he p o i ha in es o i could ob ain 1 mon h a e
he ading o und j in mon h . I is calcula ed by mul iplying
in es o i’s ne pu chase o und j (unscaled) in mon h by
und e u n 1-mon h a e , as speci ied in equa ion (2). By
analogy, we also cons uc pe o mance measu es o 3, 6,
and 12 mon hs a e he ading, which a e deno ed as
P o i
3M
i,j, , P o i
6M
i,j, , and P o i
12M
i,j, , espec i ely.
AbP o i 1M
i,j,
/AbP o
i 3Mi,j,
/AbP o i 6Mi,j, /AbP
o i 12Mi,j,
AbP o i 1M
i,j,
is he abno mal p o i ha in es o i could ob ain
one mon h a e he ading o und j in mon h . I is calcula ed
by mul iplying in es o i’s ne pu chase o und j (unscaled) in
mon h by he abno mal e u n o und j 1 mon h a e . The
abno mal e u n o und j is i s e u n o e he a e age e u n
o unds in i s sec o du ing he concu en pe iod. By analogy,
we also cons uc abno mal pe o mance measu es o 3, 6,
and 12 mon hs a e he ading, which a e deno ed as
AbP o i
3M
i,j, , AbP o i
6M
i,j, , and AbP o i
12M
i,j, , espec i ely.
In es o _P o i
i,
The cumula ed p o i ha in es o i has ea ned h ough ading
mu ual unds on he An Fo une pla o m om he beginning o
he sample pe iod un il he end o mon h .
Ci y cha ac e is ic
Pollu ed
i
A dummy a iable ha equals one o he ci y whe e in es o
i li es i i s a e age mon hly PM2.5 concen a ion is abo e he
median o all ci ies in he PRC in 2018, and ze o o he wise.
Ins umen al
a iables
SubwayS a ions
i,
The numbe o subway s a ions o he ci y whe e e ail
in es o i li es in mon h ,
scaled by he ci y’s esiden
popula ion a he end o he p e ious yea .
SubwayKms
i,
The o al mileage o subways in he ci y whe e e ail in es o
i li es in mon h , scaled by he ci y’s esiden popula ion a
he end o he p e ious yea .
PRC = People’s Republic o China.
Sou ce: Au ho s’ compila ion.
36
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