Does ESG really matter? Accessing the relevance of ESG in Indian investors’ decision-making dynamics

Sougata Banerjee and Rajasekhar David

Qualitative Research in Financial Markets, 2024, vol. 17, issue 4, 805-829

Abstract: Purpose - Environmental, social and governance (ESG) is becoming an increasingly important non-financial parameter for measuring a company’s valuation. The purpose of this study is to assess the relevance of ESG in Indian investors’ decision-making dynamics. Design/methodology/approach - This study used an exploratory qualitative research approach based on semi-structured in-depth interviews. A mixed method of purposeful and criterion sampling techniques was used to select 21 participants. Thematic content analysis was performed to analyze the data and understand the relevance of ESG in investors’ decision-making process. Findings - This study finds that while Indian investors are aware of ESG factors, they prioritize traditional financial metrics like returns and risk over ESG considerations. ESG factors are often treated as secondary, hindered by the lack of standardization in data and ratings, making them difficult to quantify and compare. Additionally, concerns about greenwashing and unreliable ESG information further reduce their importance in investment decisions. The findings of this study highlight the need for reliable ESG data, standardization and increased investor education for better integration. Research limitations/implications - This is an exploratory study with limited participants. Therefore, the results cannot be generalized to the Indian population. Different sampling criteria, a larger sample size or a quantitative research design approach may increase our understanding of the relevance of ESG. Practical implications - This study provides insights into the awareness, relative importance and challenges of including ESG in investment decision-making. The results suggest further standardization and improving the awareness and trustworthiness of ESG reporting will help improve its relevance. Originality/value - To the best of the authors’ knowledge, this study is one of its kind to investigate the awareness, perception and attitudes of Indian investors toward ESG. This study addresses an identified gap in the existing literature, explores the awareness level of ESG among Indian investors and suggests future research directions.

Keywords: ESG; Sustainability; ESG rating; Equity investor; ESG awareness; Stock markets (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-10-2023-0241

DOI: 10.1108/QRFM-10-2023-0241

Access Statistics for this article

Qualitative Research in Financial Markets is currently edited by Prof Bruce Burton

More articles in Qualitative Research in Financial Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().