The Influence of Environmental, Social and Governance (ESG) on Investment Decision Making in Investors
Keywords:
financial managementAbstract
This study aims to examine the influence of Environmental, Social, and Governance (ESG) factors on investment decision-making, with intention used as a control variable. This study is motivated by the increasing attention to sustainability issues in the investment world, particularly in the context of investors in Indonesia. Data was collected through a survey of 204 active investors and analyzed using quantitative methods with a Partial Least Squares Structural Equation Modeling (PLS-SEM) approach via the SmartPLS 4 software. The analysis results indicate that the Social and Governance dimensions of ESG have a positive and significant influence on investment decisions, while the Environmental dimension does not show a significant influence. Additionally, the intention variable as a control also proves to have a positive influence on investment decisions, consistent with the Theory of Planned Behavior (TPB) framework. These findings indicate that in the context of the Indonesian investment market, investors consider social and corporate governance aspects more than environmental aspects in their investment decisions. This study contributes empirically to the literature on ESG and investment behavior, and provides implications for market participants, regulators, and companies in designing communication strategies and investment policies that are more responsive to relevant ESG dimensions.
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