An Empirical Analysis of ESG Factors and Investment Decision-Making in India

Abstract

This study empirically examines the influence of Environmental, Social, and Governance (ESG) factors on investment decision-making among Indian investors in the post-implementation phase of mandatory sustainability reporting. Using primary survey data collected from 150 investors during January–March 2023, the study employs reliability analysis, descriptive statistics, and multiple regression techniques to assess the relative impact of ESG dimensions alongside financial return expectations and risk perception. The results indicate that environmental and governance factors significantly and positively influence investment decisions, while social factors play a comparatively weaker but still statistically significant role. Financial return expectations remain the dominant determinant, highlighting the pragmatic orientation of Indian investors. The regression model explains 55 per cent of the variance in investment decisions, confirming the growing yet complementary role of ESG considerations in capital allocation. The findings provide policy-relevant insights for regulators, firms, and market participants seeking to strengthen India’s sustainable finance ecosystem.