Opportunities to Increase Financial Well-Being by Investing in Environmental, Social and Governance with Respect to Improving Financial Literacy under COVID-19: The Case of Latvia

Inese Mavlutova, Andris Fomins, Aivars Spilbergs, Dzintra Atstaja and Janis Brizga
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Inese Mavlutova: Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia
Andris Fomins: Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia
Aivars Spilbergs: Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia
Dzintra Atstaja: Department of Management, BA School of Business and Finance, LV-1013 Riga, Latvia
Janis Brizga: Circular Economics Center, Liepaja University, LV-3401 Liepaja, Latvia

Sustainability, 2021, vol. 14, issue 1, 1-25

Abstract: The latest studies reveal that the COVID-19 pandemic has pushed investors in developed economies to focus more on the value attached to environmental and social responsibilities. Unfortunately, socially responsible investment and compliance with environmental, social and governance criteria are not given enough priority in Latvia at present. The purpose of the study is to investigate how the COVID-19 pandemic has influenced the willingness of Latvians to invest in assets that meet environmental, social and governance (ESG) criteria and factors influencing investors’ choice based on their financial literacy. Different views on sustainable investments, socially responsible investments and the relevance of environmental, social and governance criteria from private investors’ perspectives were analyzed to identify factors influencing investment decisions in favour of sustainable investments. Quantitative analysis was carried out to reveal the regularities between financial literacy, the willingness to invest to meet the ESG criteria and the level of education and income of the Latvian population, as well as their savings/investment experience. Such statistical methods as descriptive statistics and hypothesis testing were applied to perform an analysis of the results. The authors’ findings include the importance of sustainable investing to Latvian society, changes of attitude towards ESG investing in different private investors’ groups under the COVID-19 crisis, and the effects of these changes on the financial well-being of the population and, on the basis of these findings, have come to the conclusion that the willingness to invest in the assets that follow environmental, social and governance criteria depends on the level of education, savings/investment experience and income level.

Keywords: socially responsible investment (SRI); environmental social and governance (ESG); sustainable investment (SI); financial well-being; financial literacy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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