“To sum up, investors care about impact, but they evaluate impact by feeling, not by calculation. This behavior can be exploited, with the result that prosocial ambitions go to waste. The solution is well-designed labels. To help you remember, we propose the panda bear law: If only products that actually help pandas are allowed to display pandas, we’ll have more pandas.”

[COMMENTARY] This study illustrates that ultimately, no matter what the data says, it’s human emotions that govern our actions. Hence, when it comes to investing — most of us like feel-good panda-like companies.
Do Investors Care About Impact? By Julian F. Kölbel, June 8, 2023, Harvard Law School Forum on Corporate Governance, USA.