Nudges for Good

Caprock’s Matthew Weatherley-White was in illustrious company Monday when ImpactAlpha included his “Opt Out” proposal in a segment that articulates a growing trend — one that is attracting global support.

Nudges for good.
“Nudges” are small changes designed to have a big impact on individual behavior. Richard H. Thaler, a behavioral economist won this year’s Nobel Prize for his work on the idea. Automatically enrolling employees in retirement programs, for example, instead of asking them to opt in, leads to more savings. Nudges have been adopted to make all sorts of public policies more effective, from increasing car registration to getting kids to choose healthy school lunches. Impact investors have taken note. The Gates Foundation has “nudged” biotechnology startups to tackle neglected diseases in the developing world. Don’t ask investors to “opt in” to environmental, social and governance reporting, Matthew Weatherley-White, a managing director at Caprock, suggested at SOCAP last year. Instead, they should have to opt out. 
“If we made ESG the opt-out setting, the system would change fundamentally and irrevocably,” he said.

Read the rest of the Brief, including Thaler’s “three principles for the use of nudges.”

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