Retail Investors in Climate Finance: How People Make Sense of Sustainable Investing

• In Event: Economic Sociology Section Roundtables
  In Refereed Roundtable (60 minute): Roundtable 4: Money, Finance, and Valuation

Abstract

Current literature on climate finance focuses predominantly on macro-level governance and meso-level institutional transformations, often overlooking the role of retail investors. However, bottom-up practices have been shown to pave the wave for industry transformation (Lounsbury, Ventresca, and Hirsch, 2003), inviting further theorization for the sense-making processes of small investors. This study addresses this gap by examining how people understand and engage with sustainable investment amidst climate uncertainty, greenwashing, and increasing financialization and inequality.
Utilizing a mixed-methods computational social science approach, this research analyzes large-scale text data scraped from Reddit. The dataset spans diverse online communities, ranging from value-driven groups to pragmatic financial forums. I first employ structural topic modeling to identify broad thematic patterns and shifts in discourse across different communities and in response to key climate and economic events. I then conduct manual content and discourse analysis to uncover the nuanced meanings, motivations, and tensions—such as the conflict between financial gain and environmental stewardship—that drive individual decision-making.
By moving beyond the traditional rational actor model, this study investigates how discursive practices contribute to industry transformation and the emergence of a distinct small investor culture. The findings contribute to economic sociology, environmental sociology, and climate finance by centering individual-level sense-making.

Author

• Seukyoung Lee, Rutgers University-New Brunswick