ESG Factors' Influence on Financial Satisfaction: the Moderating Role of Virtual Ethics in Investment Decision

Chang, Vi Qian (2024) ESG Factors' Influence on Financial Satisfaction: the Moderating Role of Virtual Ethics in Investment Decision. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

This study examined the relationship between Environmental, Social, and Governance (ESG) factors and investors' financial satisfaction, specifically focusing on Malaysia's climate risk, human rights, and board independence. This study aimed to fill gaps in knowledge by examining the impact of ESG factors on financial satisfaction and subsequent investment decisions. The study employed PLS-SEM analysis to identify significant positive correlations between climate risk, human rights, board independence, financial satisfaction, and ESG-investment decisions. Specifically, increased awareness of climate risk, prioritisation of human rights, and greater board independence positively affect financial satisfaction, increasing the likelihood of making ESG-investment decisions. In addition, the study investigated how virtue ethics can potentially influence this relationship. The findings indicated a strong positive connection between virtue ethics and ESG-investment decisions but no moderating effect on the relationship between financial satisfaction and ESG-investment decisions. Theoretical implications extended the application of stakeholder theory and behavioural finance through a theories integration approach. Practical implications entailed the development of strategies for market participants, corporations, professional bodies, educators and policymakers to augment awareness of ESG factors and foster sustainable investment practices. This research enhanced the comprehension of ESG investing dynamics and provided valuable insights for stakeholders in the Malaysian financial sector