Environmental, social, governance (ESG) & sustainable finance : Emergence of new era of investing

Abstract

Since the financial crisis, investors have given greater regard to environmental, social, and governance (ESG) factors when making stock market choices. To achieve sustainable development, these elements are fundamental. This research paper aims to assess the impact of risk profile, investing decision-making, and asset familiarity on the preferences of individual stock market investors for ESG investing by using investment behaviour as a mediator. According to the paper, there is a growing trend in investments that consider environmental, social, and governance (ESG) concerns. The study’s methodology included secondary data sources as well as primary data obtained using a Google form poll, which yielded 400 legitimate responses. To examine the sample size, the programme G*Power 3.1.9.2 was used. A total of 400 responses were included into the research, with the programme determining a sample size of 262 individuals. People from all throughout India filled out the survey. To construct the structural equation model, the Smart PLS programme was used. The validity and reliability of the constructs were evaluated using Confirmatory Composite Analysis. Use of confirmatory composite analysis allowed for evaluation of the constructs’ dependability. With Cronbach’s Alpha, Composite Reliability, and Rho A values of 0.7, the validity and reliability tests utilised in this study were powerful. The study’s results provide light on how ESG factors would influence investing choices in the long run. When drafting legislation pertaining to the stock market, authorities would have the option to include investor preferences.