Nudging Sustainable Investments: The Role of Environmental Concern, Financial Literacy and SEBI Saarthi 2.0 in Green Shares Intention

Sustainable development in emerging economies requires mobilising retail capital to bridge net-zero financing gaps without compromising economic growth. Despite rising market participation, a gap persists between environmental concern and green share investment intentions among retail participants. Addressing this gap, this study evaluates the psychological, cognitive, and regulatory determinants of green equity investment through an extended Theory of Planned Behaviour (TPB) framework. Incorporating Environmental Concern, subjective and objective financial literacy, and regulatory FinTech tools (SEBI Saarthi 2.0), variance-based Partial Least Squares Structural Equation Modelling (PLS-SEM) was applied to a sample of 325 retail investors. Findings reveal that Environmental Concern and Subjective Norms serve as primary psychological drivers of green investment intent. Objective Financial Literacy exerts a significant direct influence, acting as a cautious risk filter against ESG information asymmetry. Conversely, institutional nudges like SEBI Saarthi 2.0 currently operate as passive repositories rather than active behavioural catalysts. This study provides actionable investor-segmentation insights for asset managers and proposes a gamified ‘Green Loyalty Framework’ to enhance long-term retail capital allocation toward green assets.