Published April 30, 2025 | Version CC-BY-NC-ND 4.0
Journal article Open

Exploring the Determinants of Understanding ESG In Financial Choices: A Linear Regression Approach

Creators

  • 1. Associate Professor, Department of Commerce, Government Arts College (Affiliated to Bharathidasan University), Tiruchy (Tamil Nadu), India.

Contributors

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Researcher:

  • 1. Associate Professor, Department of Commerce, Government Arts College (Affiliated to Bharathidasan University), Tiruchy (Tamil Nadu), India.
  • 2. Scholar, Department of Commerce, Government Arts College (Affiliated to Bharathidasan University), Tiruchy (Tamil Nadu), India.

Description

Abstract: Purpose of the Study: This study investigates the factors influencing “Understanding ESG in Financial Choices” by examining the impact of various behavioural and perceptual variables related to ESG (Environmental, Social, and Governance) investing. The goal is to identify the key determinants that shape individuals' comprehension of ESG principles in their financial decision-making. Methodology: The research utilizes a structured questionnaire as the primary instrument, targeting a sample of the general population. A total of 130 questionnaires were distributed, with 126 valid responses collected through simple random sampling. The questionnaire measured the dependent variable, Understanding ESG in Financial Choices, alongside nine independent variables: Confidence in ESG Impact on Investments, Likelihood of Social/Environmental Investing, Consideration of Sustainability in Decisions, Importance of Values-Aligned Investments, Perceived Financial Gain from ESG, Perceived Lack of ESG Knowledge, Concern over FinancialEnvironmental Trade-Offs, ESG Investment Allocation and Priority of ESG in Investment Choices. Statistical Analysis: Linear regression analysis was applied to assess the predictive power of the independent variables on the dependent variable. This approach helped identify which factors significantly contribute to ESG understanding among respondents. Major Findings: The analysis revealed that Confidence in ESG Impact on Investments and Likelihood of Social/Environmental Investing were the most significant predictors, both positively influencing ESG understanding. However, Consideration of Sustainability in Decisions had a significant but negative effect on ESG comprehension, suggesting a disconnect between sustainability considerations and ESG knowledge. These findings suggest that ESG understanding is driven by specific attitudes, highlighting areas for improved communication and education in sustainable investing.

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Additional details

Identifiers

DOI
10.35940/ijmh.G1795.11080425
EISSN
2394-0913

Dates

Accepted
2025-04-15
Manuscript Received on 09 February 2025 | First Revised Manuscript Received on 16 February 2025 | Second Revised Manuscript Received on 25 March 2025 | Manuscript Accepted on 15 April 2025 | Manuscript published on 30 April 2025.

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