How does an investor prioritize ESG factors in India? An assessment based on fuzzy AHP

Purpose The primary objective of the study is to discover the most prominent criteria and sub-criteria among environmental issues, social dimensions and corporate governance factors that may impact individual equity investors' investment decisions. Design/methodology/approach The present study collected data from 438 individual equity investors from the North Indian region. To achieve the objectives of the study, a fuzzy analytic hierarchy process (Fuzzy AHP) was applied. The key considerations of the study were environmental, social and governance (ESG) factors. Findings The governance criterion was discovered to be the most significant factor influencing individual equity investors' investment decisions among the three ESG factors, followed by environmental criteria, while social criteria were shown to be the least influential. Research limitations/implications The present study solely looked at ESG issues as drivers of stock investors' investment decisions. In the current world, however, many other factors, including behavioral biases, accounting information, ownership structure and fundamental analysis, can have a substantial influence on investors' investment decisions. Practical implications The study's findings widen the theoretical contribution in the field of responsible investment by asserting how ESG factors influence investors' investment decisions in the equity market. From a practical standpoint, this study applies to retail and institutional investors, portfolio managers, financial advisors, market regulators, corporations and society at large. Originality/value To the best of authors knowledge, no attempt has been made to prioritize the ESG issues that impact the investment decisions of individual equity investors. Ergo, this study contributes to the existing literature on socially responsible investment.