FRAMING SUSTAINABLE INVESTMENTS: A NARRATIVE STUDY INTO INFLUENCING FACTORS

Abstract

As sustainable investments gain immense momentum worldwide, this article examines the intricate relationship between sustainable investments and the factors influencing an investor’s decision-making. Our choice to explore sustainable investment relies in the realm of financial growth and societal impact. These investments, characterized by the integration of ESG criteria (Environmental, Social, and Governance), are increasingly recognized globally for their potential to deliver long-term economic returns while aligning with ethical beliefs. This research explores both internal and external factors. On one hand, internal factors include financial performance, behavioral finance (encompassing emotional and psychological drivers), demographic influences such as the age and gender of investors, and, notably, risk perception and aversion. While risk tolerance could straddle internal and external dimensions, understanding it is crucial as an internal determinant. On the other hand, external factors include government regulations and policies, market demand, public perception, and the availability and accessibility of information. By defining foundational concepts and synthesizing perspectives, this research delivers valuable insights for policymakers, investors, and individuals aiming to foster sustainable development generally and sustainable investment specifically.