Environmental, Social, and Governance (ESG) investing is crucial for sustainable development, yet understanding the drivers for Generation Z—the dominant cohort in Indonesia’s capital market—remains limited. This study addresses this gap by developing and testing a novel integrated model of ESG-based investment intention, synthesizing the Stimulus-Organism-Response Theory, Social Exchange Theory, and Signalling Theory. Using survey data from 302 Generation Z investors in Indonesia, we examine how digital and institutional stimuli—including robo-advisors, social media, exchange-provided ESG information, and external incentives—shape trust, perceived effectiveness, attitudes, and perceived financial performance, ultimately influencing ESG-based investment intention. The results, analysed via structural equation modelling, indicate that 10 out of 12 proposed hypotheses are supported. ESG-based investment intention is directly driven by attitude, perceived effectiveness, and perceived financial performance. Crucially, trust in ESG claims—shaped primarily by external incentives and official exchange information—emerges as a key antecedent to both attitude and perceived effectiveness. Theoretically, this study contributes to the sustainable finance literature by providing a comprehensive theoretical framework that explains how digital stimuli, social value exchanges, and credibility signals jointly shape the investment behaviour of a critical demographic in an emerging market. Practically, this study contributes practical guidance in promoting ESG-based investment. In this regard, these academic and practical contributions support broader efforts to foster green growth and sustainable financial markets.
Rosdiana et al. (Sun,) studied this question.