Survey study reveals risk-return perceptions and trust drive sustainable investing in retail investors, indicating that positive environmental attitudes require financial confidence.
Key Points
To examine how attitudes toward ESG investing, risk–return perceptions, and trust in ESG disclosures influence the willingness of middle-income retail investors to invest sustainably.
Surveyed N=496 middle-income retail investors in India using a framework integrating the Theory of Planned Behavior and Behavioral Reasoning Theory.
Analyzed the mediation of risk–return perception and the moderation of trust in ESG information using Partial Least Squares Structural Equation Modeling (PLS-SEM).
Attitude toward ESG investing exerted significant direct and indirect positive effects on the willingness to invest sustainably, with risk–return perception acting as the strongest mediator.
Trust in ESG information significantly reinforced the relationship between attitudes toward ESG investing and risk–return perceptions.
Favorable sustainability preferences proved insufficient to motivate sustainable investment decisions without accompanying financial reasoning and credible information.