Informativeness of environmental, social and governance (ESG) data on investment decisions: The mediating role purpose of investment

Husnah, H.; Nurdin, D.; Kasim, M.

Growing Science » International Journal of Data and Network Science » Informativeness of environmental, social and governance (ESG) data on investment decisions: The mediating role purpose of investment

Journals

IJDS Volumes

Volume 1 (8)
- Issue 1 (5)
- Issue 2 (3)

Volume 2 (12)
- Issue 1 (3)
- Issue 2 (3)
- Issue 3 (3)
- Issue 4 (3)

Volume 3 (27)
- Issue 1 (4)
- Issue 2 (9)
- Issue 3 (8)
- Issue 4 (6)

Volume 4 (37)
- Issue 1 (6)
- Issue 2 (15)
- Issue 3 (7)
- Issue 4 (9)

Volume 5 (86)
- Issue 1 (9)
- Issue 2 (11)
- Issue 3 (32)
- Issue 4 (34)

Volume 6 (163)
- Issue 1 (30)
- Issue 2 (33)
- Issue 3 (40)
- Issue 4 (60)

Volume 7 (200)
- Issue 1 (53)
- Issue 2 (46)
- Issue 3 (46)
- Issue 4 (55)

Volume 8 (243)
- Issue 1 (60)
- Issue 2 (61)
- Issue 3 (60)
- Issue 4 (62)

Volume 9 (20)
- Issue 1 (20)

Keywords

Authors

Countries

International Journal of Data and Network Science

ISSN 2561-8156 (Online) - ISSN 2561-8148 (Print) Quarterly Publication Volume 7 Issue 4 pp. 1991-2000 , 2023

Informativeness of environmental, social and governance (ESG) data on investment decisions: The mediating role purpose of investment Pages 1991-2000 Download PDF

Authors: Husnah Husnah, Djayani Nurdin, Muhammad Yunus Kasim

DOI: 10.5267/j.ijdns.2023.6.013

Keywords: Environmental, Social, Governance, Purpose of Investment, Investment Decisions

Abstract: In terms of investment, social and governance (ESG) issues consider various non-financial aspects of business performance. This includes the impact of the company's operations on the environment, society, and the quality of corporate governance. ESG factors have received significant attention from the investment community, along with increasing awareness of the importance of sustainability in investment decision making. Investors are increasingly realizing that taking ESG factors into account when making investment decisions can provide long-term benefits, both from an environmental and financial perspective. This study's objective is to investigate how ESG issues affect investment choices by using the mediation of investment goals as a variable in the relationship. This study included quantitative methodology and a survey questionnaire. Researchers gather and use analytical methods to study quantitative data. Simple random selection was used to perform the questionnaire survey of Indonesian stock market users, including individuals and businesses. There are 371 samples total that may be examined for this investigation. Software called SmartPLS 3.0 was used for the study's analysis. According to the study's findings, corporate governance, social responsibility, and the environment all have varied effects on investment choices. Environmental considerations have a major impact on investing objectives but little to no impact on investment choices. Social considerations have a favorable and considerable impact on investment decisions, but they have little impact on investment aims. Investment goals and choices are significantly impacted by corporate governance variables. According to this study, investment objectives play a part in mediating the relationship between environmental, social, and corporate governance (ESG) concerns and investment choices. Investment objectives operate as a mediator between environmental and corporate governance considerations, which both have an impact on investment choices. The impact of social considerations on investment decisions is not, however, moderated by investment objectives.

How to cite this paper

 Husnah, H., Nurdin, D & Kasim, M. (2023). Informativeness of environmental, social and governance (ESG) data on investment decisions: The mediating role purpose of investment.International Journal of Data and Network Science, 7(4), 1991-2000.

Refrences

Almeyda, R., & Darmansya, A. (2019). The influence of environmental, social, and governance (ESG) disclosure on firm financial performance. IPTEK Journal of Proceedings Series, 5, 278-290.
Alsayegh, M. F., Abdul Rahman, R., & Homayoun, S. (2020). Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability, 12(9), 3910.
Amel-Zadeh, A., & Serafeim, G. (2018). Why and how investors use ESG information: Evidence from a global survey. Financial Analysts Journal, 74(3), 87-103.
Awais, M., Laber, M. F., Rasheed, N., & Khursheed, A. (2016). Impact of financial literacy and investment experience on risk tolerance and investment decisions: Empirical evidence from Pakistan. International Journal of Economics and Financial Issues, 6(1), 73-79.
Bi, S., Liu, Z., & Usman, K. (2017). The influence of online information on investing decisions of reward-based crowdfunding. Journal of business research, 71, 10-18.
Boekhorst, J. A. (2015). The role of authentic leadership in fostering workplace inclusion: A social information processing perspective. Human Resource Management, 54(2), 241-264.
Cek, K., & Eyupoglu, S. (2020). Does environmental, social and governance performance influence economic performance?. Journal of Business Economics and Management, 21(4), 1165-1184.
Dmytriyev, S. D., Freeman, R. E., & Hörisch, J. (2021). The relationship between stakeholder theory and corporate social responsibility: Differences, similarities, and implications for social issues in management. Journal of Management Studies, 58(6), 1441-1470.
Ellili, N. O. D. (2021). Impact of ESG disclosure and financial reporting quality on investment efficiency. Corporate Governance: International Journal of Business in Society, 22(5), 1094-1111.
Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E. A., & Barlow, C. Y. (2017). Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models. Business strategy and the environment, 26(5), 597-608.
Ferrero-Ferrero, I., Fernández-Izquierdo, M. Á., & Muñoz-Torres, M. J. (2016). The effect of environmental, social and governance consistency on economic results. Sustainability, 8(10), 1005.
Giese, G., Lee, L. E., Melas, D., Nagy, Z., & Nishikawa, L. (2019). Foundations of ESG investing: How ESG affects equity valuation, risk, and performance. The Journal of Portfolio Management, 45(5), 69-83.
Jia, Y., Gao, X., & Julian, S. (2020). Do firms use corporate social responsibility to insure against stock price risk? Evidence from a natural experiment. Strategic Management Journal, 41(2), 290-307.
Kraik, A. T. (2019). Environmental, social, and governance issues: An altered shareholder activist paradigm. Vt. L. Rev., 44, 493.
Naveed, M., Ali, S., Iqbal, K., & Sohail, M. K. (2020). Role of financial and non-financial information in determining individual investor investment decision: a signaling perspective. South Asian Journal of Business Studies, 9(2), 261-278.
Nofsinger, J. R., Sulaeman, J., & Varma, A. (2019). Institutional investors and corporate social responsibility. Journal of Corporate Finance, 58, 700-725.
Pak, O., & Mahmood, M. (2015). Impact of personality on risk tolerance and investment decisions: A study on potential investors of Kazakhstan. International Journal of Commerce and Management, 25(4), 370-384.
Sahut, J. M., & Pasquini-Descomps, H. (2015). ESG impact on market performance of firms: International evidence. Management international, 19(2), 40-63.
Shaikh, I. (2022). Environmental, social, and governance (ESG) practice and firm performance: an international evidence. Journal of Business Economics and Management, 23(1), 218-237.
Sherwood, M. W., & Pollard, J. (2018). Responsible investing: An introduction to environmental, social, and governance investments. London: Routledge.
Shnayder, L., Van Rijnsoever, F. J., & Hekkert, M. P. (2016). Motivations for Corporate Social Responsibility in the packaged food industry: an institutional and stakeholder management perspective. Journal of Cleaner Production, 122, 212-227.
Sultana, S., Zulkifli, N., & Zainal, D. (2018). Environmental, social and governance (ESG) and investment decision in Bangladesh. Sustainability, 10(6), 1831.
Tan, A., Benni, D., & Liani, W. (2016). Determinants of corporate social responsibility disclosure and investor reaction. International Journal of Economics and Financial Issues, 6(4S).
Tan, Y., & Zhu, Z. (2022). The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness. Technology in Society, 68, 101906.
Tarmuji, I., Maelah, R., & Tarmuji, N. H. (2016). The impact of environmental, social and governance practices (ESG) on economic performance: Evidence from ESG score. International Journal of Trade, Economics and Finance, 7(3), 67.
Van Duuren, E., Plantinga, A., & Scholtens, B. (2016). ESG integration and the investment management process: Fundamental investing reinvented. Journal of Business Ethics, 138, 525-533.
Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An overview and new research directions: Thematic issue on corporate social responsibility. Academy of Management journal, 59(2), 534-544.
Westermann-Behaylo, M. K., Rehbein, K., & Fort, T. (2015). Enhancing the concept of corporate diplomacy: Encompassing political corporate social responsibility, international relations, and peace through commerce. Academy of Management Perspectives, 29(4), 387-404.
Xie, J., Nozawa, W., Yagi, M., Fujii, H., & Managi, S. (2019). Do environmental, social, and governance activities improve corporate financial performance?. Business Strategy and the Environment, 28(2), 286-300.