Behavioural Finance Perspectives On Esg Investment Decision-Making

This study examines the behavioural finance dimensions of Environmental, Social, and Governance (ESG) investment decision-making among individual investors. Drawing on a structured survey of 106 respondents analysed using multiple regression, chi-square tests, ANOVA, and correlation analysis in R 4. 2. 0, the research investigates how cognitive biases, emotional influences, risk perceptions, and personal value systems shape ESG portfolio allocation decisions. Key findings reveal that value alignment (β = 0. 452, p < 0. 001) and emotional influence (β = 0. 325, p < 0. 001) are the strongest behavioural predictors of ESG commitment, jointly explaining 58. 47% of variance in portfolio allocation. Risk perception significantly moderates ESG adoption (χ² = 42. 376, p = 0. 0003), with novice investors perceiving substantially higher risk than experienced peers. Personal values and ethical motivations emerge as the most consistent drivers: investors with strong value alignment are 3. 48 times more likely to hold high ESG allocations (OR = 3. 48, p < 0. 001). These findings challenge purely rational models of investor behaviour and provide actionable insights for asset managers, financial advisors, and policymakers seeking to expand sustainable finance participation. \\