Informativeness of environmental, social and governance (ESG) data on investment decisions: The mediating role purpose of investment

Abstract

In terms of investment, social and governance (ESG) issues consider various non-financial aspects of business performance. This includes the impact of the company's operations on the environment, society, and the quality of corporate governance. ESG factors have received significant attention from the investment community, along with increasing awareness of the importance of sustainability in investment decision making. Investors are increasingly realizing that taking ESG factors into account when making investment decisions can provide long-term benefits, both from an environmental and financial perspective. This study's objective is to investigate how ESG issues affect investment choices by using the mediation of investment goals as a variable in the relationship. This study included quantitative methodology and a survey questionnaire. Researchers gather and use analytical methods to study quantitative data. Simple random selection was used to perform the questionnaire survey of Indonesian stock market users, including individuals and businesses. There are 371 samples total that may be examined for this investigation. Software called SmartPLS 3.0 was used for the study's analysis. According to the study's findings, corporate governance, social responsibility, and the environment all have varied effects on investment choices. Environmental considerations have a major impact on investing objectives but little to no impact on investment choices. Social considerations have a favorable and considerable impact on investment decisions, but they have little impact on investment aims. Investment goals and choices are significantly impacted by corporate governance variables. According to this study, investment objectives play a part in mediating the relationship between environmental, social, and corporate governance (ESG) concerns and investment choices. Investment objectives operate as a mediator between environmental and corporate governance considerations, which both have an impact on investment choices. The impact of social considerations on investment decisions is not, however, moderated by investment objectives.