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I Am Ready to Invest in Socially Responsible Investments (SRI) Options Only If the Returns Are Not Compromised: Individual Investors’ Intentions toward SRI

Authors:
  • SJPI_NICM
  • L.J. Institute of Management Studies
  • Narayana Business School

Abstract and Figures

SRI, or socially responsible investment, is a relatively new concept used to describe an investment that considers social, ethical, and environmental concerns. The purpose of this study is to investigate if collectivism, concern for the environment, financial performance, and awareness of SRI influence an individual’s propensity to invest in socially responsible investments (SRI). Secondly, the study evaluates the influence of the TPB (Theory of Planned Behavior) model constructs, attitude, subjective norms, and perceived behavioral control on the SRI investment intention of individual investors. A structured questionnaire was used to collect data on 449 individual investors for this cross-sectional investigation. The data were then analyzed further with a two-step structural equation modeling technique performed in Smart PLS 3.2.9. The PLS-SEM analysis found that collectivism, environmental concerns, financial performance, and awareness of SRI all had significant positive effects on attitudes toward SRI, which, in turn, resulted in SRI investment intention. Further, subjective norms and perceived behavioral control had a significant impact on individuals’ intentions regarding SRI.
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Sustainability2022,14,11377.https://doi.org/10.3390/su141811377www.mdpi.com/journal/sustainability
Article
IamReadytoInvestinSociallyResponsibleInvestments(SRI)
OptionsOnlyIftheReturnsAreNotCompromised:Individual
Investors’IntentionstowardSRI
HeenaThanki
1
,SweetyShah
2
,HarishchandraSinghRathod
1
,AnkitD.Oza
3
and
DumitruDoruBurduhosNergis
4,
*
1
DepartmentofManagement,ShriJairambhaiPatelInstituteofBusinessManagementandComputer
Applications(SJPINICM),Gandhinagar382007,India
2
DepartmentofManagement,LJInstituteofManagementStudies,LJUniversity,Ahmedabad382210,India
3
DepartmentofComputerSciencesandEngineering,InstituteofAdvancedResearch,
Gandhinagar382426,India
4
FacultyofMaterialsScienceandEngineering,GheorgheAsachiTechnicalUniversityofIasi,
700050Iasi,Romania
*Correspondence:doru.burduhos@tuiasi.ro
Abstract:SRI,orsociallyresponsibleinvestment,isarelativelynewconceptusedtodescribean
investmentthatconsiderssocial,ethical,andenvironmentalconcerns.Thepurposeofthisstudyis
toinvestigateifcollectivism,concernfortheenvironment,financialperformance,andawarenessof
SRIinfluenceanindividual’spropensitytoinvestinsociallyresponsibleinvestments(SRI).Sec
ondly,thestudyevaluatestheinfluenceoftheTPB(TheoryofPlannedBehavior)modelconstructs,
attitude,subjectivenorms,andperceivedbehavioralcontrolontheSRIinvestmentintentionofin
dividualinvestors.Astructuredquestionnairewasusedtocollectdataon449individualinvestors
forthiscrosssectionalinvestigation.Thedatawerethenanalyzedfurtherwithatwostepstructural
equationmodelingtechniqueperformedinSmartPLS3.2.9.ThePLSSEManalysisfoundthatcol
lectivism,environmentalconcerns,financialperformance,andawarenessofSRIallhadsignificant
positiveeffectsonattitudestowardSRI,which,inturn,resultedinSRIinvestmentintention.Fur
ther,subjectivenormsandperceivedbehavioralcontrolhadasignificantimpactonindividuals’
intentionsregardingSRI.
Keywords:sociallyresponsibleinvestments(SRI);investmentintention;collectivism;environmen
talconcern;attitude;SRIawareness
1.Introduction
Fundamentally,sociallyresponsibleinvestments(SRI),alsoknownas“ethicalin
vesting”,“greeninvesting”,“valuesbasedinvesting”,“sustainableinvesting”,andmore
recentlysimply“responsibleinvesting,”and“ESGinvestingreferstothenotionofin
vestingthatconsiderssocial,ethical,governance,andenvironmentalissues[1,2].SRIhas
piquedthecuriosityofmarketparticipantsworldwide[3–6].Everyreasonableinvestor
hasalwaysbeenconcernedwithchoosingthebestinvestmentportfoliofortheirhard
earnedcash.Investmentbehaviorisinfluencedbyelements,includingfundsafety,cur
rentandcapitalreturns,andliquidity.
Furthermore,asawarenessofsustainabilityhasexpanded,investorshavebegunto
emphasizebusinessesthathaveasocialandenvironmentalfootprintthroughtheirprod
uctsandservices.Therehasbeenariseininvestors’integrationofsocial,environmental,
andethicalconsiderationsintotheirinvestmentdecisions[7–9].
Citation:Thanki,H.;Shah,S.;
Rathod,H.S.;Oza,A.D.;Burduhos
Nergis,D.D.IamReadytoInvestin
SociallyResponsibleInvestments
(SRI)OptionsOnlyIftheReturns
AreNotCompromised:Individual
Investors’IntentiontowardSRI.Sus
tainability2022,14,11377.
https://doi.org/10.3390/su141811377
AcademicEditor:JeanPierreGueyie
Received:13August2022
Accepted:7September2022
Published:10September2022
Publisher’sNote:MDPIstaysneu
tralwithregardtojurisdictional
claimsinpublishedmapsandinstitu
tionalaffiliations.
Copyright:©2022bytheauthors.Li
censeeMDPI,Basel,Switzerland.
Thisarticleisanopenaccessarticle
distributedunderthetermsandcon
ditionsoftheCreativeCommonsAt
tribution(CCBY)license(https://cre
ativecommons.org/licenses/by/4.0/).
Sustainability2022,14,113772of17
SRIisaninvestingstrategythatseekstomaximizebothsocialimpactandfinancial
returnsforinvestors.SRIisatypeofinvestmentthattakesintoaccountboththevalueof
acompany’slargerinfluenceontheworldanditsprospectivemonetarygains.
ThepopularityofSRIhasincreasedsubstantially,andeightypercentofinstitutional
investorsincludeESGfactorsintheirinvestingstrategies[10].Assuming15%growth,
ESGassetsundermanagementmayaccountformorethanthepredicted$140.5trillion
globaltotalby2025[11].Additionally,theperformanceofSRIfundsduringtimesofcrisis
isbetterthanthatofconventionalfunds[12].Asdiscoveredduringthe2002technology
(ICT)bubblebustandthe2008globalfinancialcrisis,SRIfundsoutperformedconven
tionalfundsintheUSA.
Theeconomicandsocialeffectsofenvironmental,societal,andgovernanceconcerns
wereonceagainbroughtintosharpfocusbytheCOVID19catastrophe.Thecrisishas
alsoshownthatSRIadoptionisnotsomefaroffidealbutrathersomethingthatcanbe
performedrightnowtomakecommunitiesandbusinessesmoreresilient[13].Duringthe
pandemic,investors’increasinginterestinESGelementsofcorporations,impliesthey
perceivesustainabilityasaneed[14].DuringtheCOVID19pandemicshutdown,ESG
stocksalsoprotectedinvestorsagainstlosses[15].
FundsthatallocateinvestormoneyaccordingtoESGissuesheld$357billionatthe
endof2021[16].InIndia,SRIfundshavebeengainingmomentuminrecentyears,and
therehasbeenariseininterestinESGinvesting.Companies,governments,marketregu
lators,andothershavesteppeduptoestablishESGindicesandfundsinordertoeducate
andenticethecountry’sinvestorswiththeconceptofsustainableinvesting.
Underthecategoryofsustainability,theS&PBSEexchangecomprisesthreeindices:
“S&PBSEGREENEX”,“S&PBSECARBONEX”,and“S&PBSE100ESGIndex”andthe
NSEindexincludesthe“NIFTY100ESGIndex”,“NIFTY100EnhancedESGIndex”,and
“Nifty100ESGSectorLeader”[17].TheAUMofESGFundsinIndiaisnowat$1839mil
lionasof31March2022,andincreasingAMCsareaimingtoadoptanESGstrategy[18].
Incorporatingsocialandenvironmentalconcernsintoinvestmentdecisionmakingpro
cesses,sustainableinvestingaimsatensuringthedevelopmentofagreeneconomyand
hasbecomeanincreasinglyimportantcomponentofbusinesssocialresponsibility[19].
AspertheTheoryofPlannedBehavior(TPB)[20],aperson’sattitudedetermines
theirpurposetoengageincertainbehavior.Basedontheprecedingfacts,itiseasyto
deducewhatdrivestherationalinvestor,whoconsidersbothfinancialperformanceand
ethicswhilemakinginvestmentdecisions.Oneprobableexplanationisaperson’satti
tude,whichistheresultofhisorhermoralandethicalbeliefsthatmayaffectinvestment
decisions[21–23].Personalvalues,suchascollectivism,andenvironmentalattitudesim
pactinvestors’desiresfornonfinancialoutcomes[24].
TheunderstandingofSRIgivesinformationonhowtobetterexplaintherequire
mentsandmotivesofinvestors.Theknowledgecanhelptheinvestorstoleadtoapositive
attitudeandhelpsindevelopingtheintentionforSRI[25,26].Astherelevanceofsustain
ableinvestingisgrowingwithtimeandmoresuchfundsarebecomingavailable[27,28],
socialgroupsarealsoinfluencingintentionstowardsSRI[29]withperceivedbehavioral
control[30]inadditiontoattitudinalbeliefs.
ThefocusofSRIoverthepastdecadehasbeenondetermininghowtheseinvest
mentsstackupagainstmoreconventionalones[31,32].Althoughresearchershavead
dressedinvestors’financialcircumstanceswhenmakinginvestmentdecisions,Ngaand
Yien[33]arguedthattheinclinationofinvestorstoinvestinenvironmentallyaccountable
companieshasbeenlargelyoverlookedbypreviousstudies.
Thisstudyisnovelinthesensethat,fromtheoutset,weattemptedtoinvestigateif
collectivism,environmentalconcerns,financialperformance,andawarenessaboutSRI
haveanimpactonattitudeforinvestinginSRI;andsecond,weexaminedtheimpactof
attitude,subjectivenorms,andperceivedbehavioralcontrolontheinvestmentintention
oftheinvestors.
Sustainability2022,14,113773of17
Usingstructuralequationmodeling,thisresearchattemptstoaddressthequestion
ofhowmuchvarianceinthedesiretoinvestinSRI,isexplainedbythefactorsunder
study.Thisstudy’sresearch,whichiswovenintothethreadsofTPBtheory,givesinsight
intothebehavioraltraitsofinvestorswhoareinterestedinSRI.Theaddedconstructsin
theTPBmodelcontributetothetheoryofsustainableinvestmentswiththeparadigm
shiftsintheglobalfinancialmarkets.Thiscomprehensionwillprovideinformationon
howtheneedsandgoalsofinvestorsmightbebettercommunicatedtothekeystakehold
ers.Withthisinformation,fundmanagersmaybeabletoprovideamorerelevantselec
tionoffinancialavenuesandamoreefficientmarketingstrategy,thereby,improvingtheir
abilitytoservicetheirinvestors.
Thefindingsofthestudyhavesignificantimplicationsforpolicymakersaswell,who
mightapplythisknowledgetohelppromoteacapitalmarketthatisfavorabletoSRI.The
structureofthisstudyisasdescribedbelow.Theinvestigationcommenceswithadiscus
sionofthetheoreticalfoundation,followedbythecreationofhypothesesandthespecifi
cationofamodel.Thesectionthencontinuestotheresearchmethodologyfollowedbya
discussionofthedataanalysisandstudyfindings.Thepaper’sconclusionemphasizesthe
implications,limitations,andscopeforfurtherstudy.
2.TheoreticalBackground
2.1.TheoryofPlannedBehavior(TPB)
Extensiveresearchrevealedthatavarietyofpsychologicalfactorshaveasignificant
influenceonthefieldofbehavioralfinance.Formorethantwodecades,theTPBmodel
hasbeenusedinvariousempiricalanddescriptiveresearchstudiesinvestigatingthefac
torsofhumanbehavioralintention[34].ThetheoryisanexpansionoftheTheoryofRea
sonedActionTRA[35],whichisbasedontheexpectancyvalueformulation[35,36].The
TPBdescribesthreesignificantprecursorsofhumanbehavior:attitude,subjectivenorms,
andperceivedbehavioralcontrol.
Thecomponentofbehavioralintentionfurthermediatesthisassociation.According
toAjzen[14],anattitudinalbeliefisreferredtoasanATT,whereasanominalbeliefis
referredtoasSN,andacontrolbeliefisreferredtoasPBC.TheTPBmodelhasalsobeen
appliedinvariousfinancialdecisionsandtheadoptionoffinancialproducts.Thecurrent
studyadoptedtheTPBmodeltounderstandthefactorsaffectingSRIinvestmentsinIndia.
Inthepresentresearch,attitudeisdefinedastheinvestor’sevaluationoftheobjec
tivesofinvestmentinSRI.Investors’favorableattitudesarelikelytopromoteSRIbehav
iors,accordingtoacomprehensiblerationale.Attitudehaslongbeendemonstratedtoal
terbehavioralintention[35].Moreover,theattitudetowardSRIcanbeformedbasedon
theunderlyingaspectsthatareresponsibleforshapingtheattitudetowardSRI.Inthis
study,theitemsthatcaninfluenceone’sperspectiveonSRIaretakentobecollectivism,
concernfortheenvironment,financialperformance,andawarenessofSRI.Theassocia
tionhasbeenexperimentallyvalidatedbystudiesinthisfield[3,37].
AnextensionoftheTPB,subjectivenormspositthatanindividual’sbehaviorisim
pactedbytheirperceptionsabouttheapprovaloftheirsignificantothers.Individualsor
groupswithopinionsonhowoneshouldactinthissituationareconsidered“significant
others.”Itissupposedthatsubjectivenormscanevaluatethesocialconstraintsexerted
onpeopletoengageinorrefrainfromagivenbehavior.Inthisstudy,subjectivenorms
simulatedinvestors’perceptionsoftheextenttowhichtheirsocialnetworksendorse,sup
port,oradoptthepracticeofinvestinginSRI(i.e.,friends,relatives,andfinancialplan
ners).
Aperceivedbehaviorcontrolistheirdegreeofinfluenceoverwhetherornotaperson
performsanaction,asopposedtotheexpectationsregardingtheconsequencesofthat
conduct[32].Apersoncanonlytakeactionifhebelieveshehassomedegreeofcontrol
overthesituation(i.e.,theavailabilityofusefultoolsandoptions)[20].
Sustainability2022,14,113774of17
EarlierstudieshaveappliedtheTPBmodeltomeasuretheSRIintentionofinvestors
[25,38,39]andconcludedthatattitude,subjectivenorms,andperceivedbehavioralcontrol
haveapositiveimpactontheinvestors’intentionforSRI.Inthisstudy,keyresources
includeinvestors’opinionsofSRIandtheeasewithwhichSRIassetsmaybetraded.
2.2.HypothesesDevelopment
SomeofthestudiesontheuseoftheTPBindicatethatthetheorycanforecastthe
behaviorofinvestorsconcerningSRI[3].AccordingtotheTPBtheory,themostimportant
predictorofbehaviorisone’sintention,becauseone’sactionsarecontrolledbyone’sin
tentions[40,41].Behavioralintentsaremotivatingelementsthathaveasignificantimpact
onaperson’swillingnesstoperformanactivity[20].TheTPBwasutilizedasaframework
forthisstudy,togetherwithothercomponents,toanalyzethefactorsinfluencingIndian
investors’behaviortowardSRI.Akeysectionoftheresearchisdeterminingwhetherin
vestors’statedintentionstomakeSRIcontributetobetterexplanationsoftheirstatedat
titudes,subjectivenorms,andperceivedbehavioralcontrolformakingSRIdecisions.
2.3.CollectivismtoAttitude
Collectivismistheideathatthecommunityismoreimportantthantheperson,as
statedby[42].Indianculture,accordingtoHofstede[43],iscollectivisticinnature.A
broaderdefinitionofcollectivismwasdiscussedbySeo[44]andencompassesvariousfac
ets,includingworkgrouporientation[43,45–47],willingnesstoserveforthegreatergood
[46,48,49],andthewillingnesstoperformethicalobjectives[45,46].Thereistheexistence
ofculturalconglomeratesattheregionalandnationallevelsthatinfluencethebehavior
ofsocietiesandorganizationsasawholeandpersistforextremelylongstretchesoftime.
Collectiveculturesincludepeoplefrombirthintostrong,cohesivecommunitiesthat
givelifetimesecurityinexchangeforloyalty[50].Collectivistculturesencouragetheir
memberstodevelopinterdependence;individualsviewthemselvesasinextricablytiedto
othersaroundthem,andtheirbehaviorplacesapriorityonpreservingmutualtrustover
pursuingindividualgoals.Researchshowsthatcollectivismisavaluesystemthatmakes
peoplemoreattentivetoenvironmentalandsocialconcerns[51,52].Thisleadsustohy
pothesizethefollowing:
H1(a):CollectivismwillpositivelyaffecttheattitudetowardSRI.
2.4.EnvironmentalConcernsandAttitudes
Decadesago,environmentalconservationbecamemoreimportant[53].Withtime,
customershavebecomemoreknowledgeableandnowvalueenvironmentallysafeprod
uctsandfairdecisionmaking[54].Risingenvironmentalawarenessinfluencescustomer
behavior[55]andfinancialdecisions[56,57].Itwasfoundthatenvironmentaldegradation
issues,suchaspollution,greenhousegasemissions,ozonedepletion,andclimatechange,
affectinvestmentdecisions[58]andaddingtothat,itwasfoundthatinvestinginenvi
ronmentallyconsciousmutualfundsshowsenvironmentalsensitivity[24].
AssetmanagementbusinesseshavecreatedESGandgreenfundsandenvironmental
mindsetsinfluencetheprocurementofenvironmentallyfriendlyproductsandSRIs
[59,60].Companieshavealsoissued“greenbonds,”whichhavebecomepopularamongst
investorsbecause,inadditiontobeingenvironmentallyfriendly,theyprovidegreater
longtermreturns[60].
Thereisalsothepotentialforgreenfinancetoplayasignificantroleinassistingbusi
nesseswithenvironmentallyresponsibleinitiatives [61],resultinginindividualswhomay
actontheirenvironmentalconcernsbyinvestinginecologicallyfriendlyinvestmentop
tions[24].Environmentalistsalsoprioritizeethics;thus,theyinvestinsociallyresponsible
companies[29,57].Thisleadstothefollowinghypothesize:
Sustainability2022,14,113775of17
H1(b):EnvironmentalConcernswillpositivelyaffecttheattitudetowardSRI.
2.5.FinancialPerformancetoAttitude
Financialreturnandriskarecrucialdecisionmakingelementsineveryinvestment
choice.TheseconsiderationsarealsolikelytoaffectSRIgiventhattheultimategoalofany
investmentisfinancialgain[4].Inacademicresearch,someresearchershaveindicated
thatSRIperformsequallywithnormalinvestments[62].However,thefinancialperfor
manceofSRImanagedfundsisseenindifferentwaysbyinvestors[63].Ethicalorsocially
consciousinvestorsdonotmakeinvestmentdecisionsbasedonpotentialfinancialgain
[64].AlthoughinvestorsconsiderSRIfundstoberiskierduetotheirearlystage,apositive
correlationwasdiscoveredbetweeninvestmentbehaviorandtheinvestor’sinclinationto
pursuenonfinancialinvestinggoals[65].Asaresult,thefollowinghypothesisisdevel
oped.
H1(c):FinancialperformanceofSRIwillpositivelyaffecttheattitudetowardsSRI.
2.6.SRIAwarenessofAttitude
Researchisscarceinthefinancedomainregardingtheeffectsofknowledgeandun
derstandingofinvestmentavenuesandtheattitudesaboutit.However,theeffectof
knowledgeandunderstandingoftheconceptonattitudeisefficientlyresearchedinother
areas,suchasagriculture,food,beverages,andmedicalscience.Forexample,theattitude
towardselfmedicationisimpactedbyawarenessofselfmedication[66],andknowledge
aidsinformingandshiftingattitudestowardgeneticallymodifiedfoods[67].
Financialawarenessistheabilitytomakesoundfinancialdecisions[68].SRI’sfinan
cialandnonfinancialgoalsrequireahighlevelofinformationandawareness,andpur
chasechoicesarehighlyinfluencedbyconsumerawareness[69].Ifaninvestorisaware
ofanSRI,theycangivethoughttoinvestinginthat,andalackofinvestorinformationor
unawarenesshindersSRIgrowth[19].SinceSRIinvolvesbothmonetaryandnonmone
tarymotivations,SRIwillneedsubstantialfinancialknowledge.
Alongwithawareness,understandingisalsoimportantascustomerunderstanding
affectstheirpropensitytobuygreen/sustainableproducts[70].Severalstudieshave
shownthattheimportanceoffinancialadvisers’expertiseinsustainablefundsaffectsthe
attitudeofinvestorstowardSRI[71–73].ItwasalsosuggestedthatSRIandethicalfund
informationinfluenceriskperception[74].Consequently,comprehensionofsocialre
sponsibilitymeasuresencouragessustainableinvestment.Thus,wepropose:
H1(d):SRIawarenesswillpositivelyaffecttheattitudetowardSRI.
2.7.AttitudetoSRIIntention
AccordingtoAjzenandFishbein[35],anindividual’sattitude(favorable/unfavora
ble)influencestheirdesiretocommitaparticularbehavior.Attitudeisthedegreeofem
phasispeopleplaceondoingaspecificbehavior[73].Itisthemostimportantvariables
foraninvestmentdecisionareattitudeandpersonalinterest[75].Aninvestor’sattitude
towardmoral,environmental,andsocietalconcernsdeterminesthechoiceofSRI[4,31,76].
Individualsnowareconcernedabouttheirsocialimageandareobservantofmarket
trends,whichreinforcestheirwillingnesstoparticipateinSRI[77].
Attitudeispositivelylinkedwithbehavioralintentionstoinvestinthestockex
change[78]andonlinetradingintentions[79].Investinginasustainablewayisanim
portantconsiderationforeachinvestor[80].Thereisalinkbetweengreenattitudesand
sustainableinvestingbehavior[81].Additionally,itwasfoundthatcustomers’views
aboutpurchasinggreenitemsadequatelypredictthedecisiontopurchaseecological
products[82].Asaresult,theproposedhypothesisisasfollows:
H2:AttitudetowardSRIwillpositivelyinfluenceSRIinvestmentintention.
Sustainability2022,14,113776of17
2.8.SubjectiveNormstoSRIIntention
Subjectivenormisanassessmentofothers’opinionsabouttheacceptanceofacertain
behavior[35].Subjectivenormsincludepeerorgroupperceptionsofbehavioranden
couragementtoconformtothesebeliefs.Subjectivenormsarethemotivatingforceand
burdenthatapersonfacesfromsocietyasaresultofthebehavior[20].Thesubjective
normsvariablesuggeststhatanindividual’sbehaviorishighlyinfluencedbytherefer
encegroup.
Itproposedthattheopinionsoffriendsandfamilyhaveasubstantialimpactonan
investor’sinclinationtoinvestinstocks[40].ItwasstudiedbyAdamandShauki[25]how
individualbehaviorisimpactedbysomeone’simportantviewaboutwhetheragivenbe
haviorshouldbeperformedornot.Peoplewhocananticipatesupportivesubjective
standardsaremorelikelytoinvestthanpeoplewhodonothavetodealwithanykindof
socialpressure[83,84].Inthesamevein,considertheproposedhypothesis:
H3:SubjectivenormswillpositivelyinfluenceSRIinvestmentintention.
2.9.PerceivedBehavioralControltoSRIIntention
Perceivedbehavioralcontroloverasubjectcomprisestheavailabilityofsuitablere
sourcesandopportunities[20].Behavioralcontrolislinkedtoanindividual’sconviction
intheresource’sability—theirtalentsandcapacities.Oneofthemainaspectsdetermining
intentionisperceivedbehaviorcontrol,whichreferstoanindividual’sresponsetosome
thingasabehavioralcontrol,whichrelatestotheeaseordifficultyofperforminganac
tivity.Thisaspectisconnectedtoinvestors’capacitiesandprospectsinSRI[78,85,86].In
thisvein,thefollowinghypothesisisproposed:
H4:PerceivedbehavioralcontrolwillpositivelyinfluenceSRIinvestmentintention.
3.MaterialsandMethods
Basedonthetheoreticalmodelandthehypothesesdiscussedintheabovesection,
theproposedmodelissummarizedinFigure1.Theconstructs,suchascollectivism,en
vironmentalconcerns,thefinancialperformanceofSRI,andSRIawareness,areproposed
tohaveapositiveimpactontheattitudetowardsSRI,whichisoneoftheconstructsof
TPB.Attitudewithsubjectivenormsandperceivedbehavioralcontrolhaveadirectposi
tiveimpactonSRIinvestmentintention.
Figure1.Conceptualmodel.
Sustainability2022,14,113777of17
Aquantitativeapproachtoresearchisonethatusesnumericaldataandotherquan
tifiablevariablestosystematicallyexploreaphenomenonanditsrelationships[87].Itis
employedtoexplain,predict,andexertcommandoveraphenomenonbyprovidingan
swerstoquestionsbasedoncorrelationsbetweenvariables.
3.1.MeasurementScales
Theinformationforthestudywasgatheredbytheuseofastructuredquestionnaire.
Therewerethreepartstotheinstrument,thefirstofwhichcoveredtherespondents’de
mographicdata,suchasage,gender,maritalstatus,educationlevel,occupation,and
yearlyincome.Inthesecondpartofthequestionnaire,respondentswerequestionedto
assesstheimpactofvariousfactorsthatmightaffecttheirintentionofmakingSRI,such
ascollectivism,environmentalconcerns,thefinancialperformanceofSRI,SRIawareness,
attitudetowardsSRI,subjectivenormsandperceivedbehavioralcontrol.Thefinalseg
mentincludedLikertscalequestionsdesignedtoassessrespondents’willingnesstoin
vestinSRI.ThestatementswereratedonaLikertscalefrom1(stronglydisagree)to5
(stronglyagree),witheachstatementreceivingascorebetween1and5.
TheTPBdevelopedbyAjzen[20]measurewasusedinthestudytoassesstheinten
tionofrespondentsforSRI.Thisincludes(i)itemsrelatedtotheconvenienceofSRI(three
items)tomeasuretheattitudeoftheinvestors;(ii)scalebasedonthereferentgroupand
theirconcernaboutSRItomeasurethesubjectivenorms(threeitems);and(iii)perceived
behavioralcontrol,whichstatesthecontrollingfactorsincludinginvestor’sskillstoinvest
inSRI(threeitems).
ThescaleforcollectivismadaptedfromSinghetal.[52]includesstatements(five
items)relatedtothebeliefregardingcommunitywelfare.Theenvironmentalconcerns
scale(fiveitems)wasdevelopedbySinghetal.[52]andmeasurestheenvironmentalatti
tudetowardsSRI.ThefinancialperformanceofSRIwasadoptedfromLuongandHa[88]
includingstatements(threeitems)ofreturnexpectationsfromSRIandawarenessofSRI
istakenfromAnsuMensahetal.[89]andhasstatements(fiveitems)relatedtobasicun
derstandingandknowledgeofSRI.
3.2.Sample
Thiscrosssectionaldescriptiveresearchusedaconvenientsamplingmethodto
gathertherequireddata.InvestorsinIndiaabovetheageof18participatedinthesurvey.
ToreachIndianinvestors,researchersnetworkedwithindividualsatvariousbrokerage
housesinthecountry,who,inturn,sharedthesurveylinkwiththeirclientele.Infor
mationwasgatheredfrom557investorsfrom15February2022,until6April2022.Fur
thermore,108ofthe557replieswerediscardedbecausetheywereincomplete.Asaresult,
449responseswereprocessedforadditionaldataanalysis(seeTable1).
3.3.DataAnalysisTool
SmartPLS3.2.9softwarewasusedtotestthereliability,validity,theory,andhypoth
esis.PLSisavariancebasedstructuralequationmodeling(SEM)employingthepartial
leastsquarespathmodelingtechnique.Itisatwostagemodel:first,itisevaluatedforthe
qualityofthemeasurements(MeasurementModel),andthenfortheinterdependenceof
thevariables(StructuralModel).PLS’abilitytotestthetheorydevelopment[90],thecom
plexlinearmodelswithhighreliability[91],andtheapplicabilityinnonnormaland
smalltomediumsamples[92,93]makesitappropriateforuseinthecurrentstudy.
Alllatentvariablesareconsideredreflectiveinthisstudyandareassessedusingtheir
indicators.ThetwostageanalyticalprocedureproposedbyAndersonandGerbing[94],
withthemeasurementmodelisevaluatedfirst,andthenthestructuralmodelevaluated
fortheoryandhypothesistestingisemployedhere.
Themeasurementmodelwascheckedforreliabilityandvalidityusing“Cronbach’s
alpha”(CA),the“compositereliability”(CR),the“AverageVarianceExtracted”(AVE),
Sustainability2022,14,113778of17
the“Fornell–Larckercriterion”,andthe“heterotrait–monotraitratio”(HTMT)[95].Sec
ond,theVarianceinflatedfactors(VIF),‘coefficientofdetermination(R2)’,“Standardized
RootMeanSquareResidual”(SRMR)’,and“NormedFitIndex(NFI)”wereconsideredto
checkthevalidityandfitofthestructuralmodel.Thedetailedresultsarepresentedinthe
followingsection.
3.4.CommonMethodBias
“CommonMethodBias”(CMB)occurswhendifferencesthroughoutanswersare
causedbythetoolinsteadofduetotherealbiasoftherespondents,whichiswhatthe
instrumentisattemptingtoreveal[96].Thismightbeowingtotherespondent’ssocial
desirabilitytendencies,dispositionalmoodstates,orimpulsestosubmitorrespondina
mild,moderate,orextrememanner[97].CMBalsooccurswhendataiscollectedthrough
asingleinstrumentforbothdependentandindependentvariablesfromthesamere
spondent[96].ThepresenceofCMBinthedatacaninfluencethereliabilityandvalidity
oftheinstrument.
Thesemightleadtoerroneousconclusionsregardingthereliabilityandconvergent
validityofascale[98].Additionally,CMBalsoinflatesthepathcoefficientsinstructural
modeling[99].Inshort,thepresenceofCMBindatamayleadtoincorrectresearchfind
ings,andhence,beforestartingwiththeanalysis,itmustbeassuredthatthedataisfree
fromCMB.ToinvestigatetheCMBinPLSSEM,Kock[99]recommendsusingthefull
Collinearityassessment(Varianceinflatedfactors,VIF)test,andVIFvaluesbelow3.3nul
lifythepresenceoftheCMB.AlltheconstructssuccessfullypassedthetestastheVIF
valuesarewellbelow3.3.Hence,itcanbeconcludedthatthedataisfreefromCMB.
3.5.ResultsandDiscussion
Asthescalesusedherehavebeenpreviouslytestedfortheirreliabilityandvalidity
inpriorresearch,CFAwasperformedtoevaluatethereliabilityandvalidityofthemeas
ure.Attheinitialscreening,twoitemshadafactorloadingofbelow0.7(seefootnoteof
Table2);thus,theywereremovedfromtheanalysis,andthemodelwasrunagaintocheck
forreliabilityandvalidity.Internalconsistency/reliabilitywasmeasuredusingCAand
CRtests[95].TheCAandCRvaluesofallthevariablesarehigherthan0.7(seeTable2)
andsuggestgoodinternalconsistency[95].
Theconvergentvalidityofthemodelwasconfirmedusingouterloading,Average
VarianceExtracted(AVE),andCR[95].Table2indicatesthattheouterloadingofallthe
indicatorsisgreaterthan0.7(atinitialscreening,twoitemswereremoved),theAVEofall
thelatentvariablesisabovetheminimumprescribedlevelof0.5,andthecompositereli
abilitiesofallthelatentvariableswerehigherthan0.7[95].Hence,themeasurement
model’sconvergentvalidityisgood.
Table1.Thesamplecharacteristics.
VariablesCategoryFrequencyPercent
GenderMale26559.02
Female18440.98
Age
18–257717.15
26–3516737.19
36–4512227.17
46–555612.47
56–65276.01
MaritalstatusMarried28463.25
Unmarried16536.75
EducationQualifica
tion
Undergraduate286.24
Graduate16837.42
Sustainability2022,14,113779of17
Postgraduate/professional22349.67
Doctorate224.90
Other81.78
Employment
Student224.90
SalariedGovernmentsectoremployee12327.39
Salariedprivatesectoremployee19342.98
Selfemployed4910.91
Business6213.81
AnnualIncome
Below$3125224.90
Between$3125and$50009922.05
Between$5000and$812515835.19
Between$8125and$10,0006314.03
Between$100,000and$12,500449.80
Above$12,5006314.03
(Note:1.totalnumberofrespondentsequals449;2.INR()isconvertedintoequivalentUSD($).The
rateon1September2022was79.67roundoffto80)(Source:authors’calculationusingSPSS).
Table2.Reliabilityandvalidity.
ConstructsStandardized
FactorLoadingCACRAVE
Collectivism(COLL)0.7060.8140.524
COLL_10.747

COLL_30.760
COLL_40.760
COLL_50.724
EnvironmentalConcerns(EC)0.7960.8690.627
EC_10.865

EC_20.853
EC_30.775
EC_50.756
FinancialPerformance(FP)0.7500.8560.667
FP_10.823
FP_20.887
FP_30.733
AwarenessaboutSRI(SRIA)0.8150.8720.582
SRIA_10.791

SRIA_20.883
SRIA_30.790
SRIA_40.721
SRIA_50.783
Attitude(ATT)0.8000.8840.719
ATT_10.754
ATT_20.890
ATT_30.891
PerceivedBehavioralControl(PBC)0.8270.8970.743
PBC_10.871
PBC_20.866
PBC_30.849
SubjectiveNorms(SN)0.8260.8960.741
SN_10.868
SN_20.853
Sustainability2022,14,1137710of17
SN_30.862
InvestmentIntention(II)0.8450.8970.685
II_10.869

II_20.846
II_30.853
II_40.737
(COLL_2loading0.526andEC_4loading0.321)(Source:authors’calculationusingSmartPLS3.2.9).
Threemethodshavebeensuggestedforaccessingdiscriminantvalidity;thecross
loadingtest,the“Fornell–Larckercriterion”,and“heterotrait–monotraitratio”(HTMT)
[95].IthasbeenadvocatedthattheHTMTratioshouldbepreferredovertheothercriteria
forconfirmingthediscriminantvalidity[95].“Fornell–Larckercriterion”,and“hetero
trait–monotraitratio”(HTMT)testswereusedheretoconfirmthediscriminantvalidity.
AsperFornell–Larckercriterion“thesquarerootoftheAVEofeachconstructshould
behigherthantheconstruct’shighestcorrelationwithanyotherconstructinthemodel.”
Table3showsthatthesquarerootoftheAVEofeachconstructishigherthanthecon
struct’shighestcorrelationwithanyotherconstruct(diagonalvaluesinbold).Asperthe
HTMTcriterion,theconstructs’HTMTvaluesshouldnotexceed0.85[95].Table4shows
thatallvaluesarewellbelow0.85;thisreconfirmsthediscriminantvalidity[100].
Table3.Fornell–Larckercriterion.
ATTCOLLECFPIIPBCSNSRIA
ATT0.848 
COLL0.2750.724
EC0.4320.1570.792
FP0.4950.0180.3430.817
II0.487−0.0300.3460.4410.828
PBC0.3060.0220.2090.2350.5770.862
SN0.318−0.0350.1980.2550.6960.5550.861
SRIA0.5320.1700.5010.2910.3620.3180.3400.763
(Source:authorscalculationusingSmartPLS3.2.9).
Table4.Heterotrait–monotraitRatio(HTMT).
ATTCOLLECFPIIPBCSNSRIA
ATT 
COLL0.334 
EC0.5420.200
FP0.6300.0810.440
II0.5940.0670.4240.551
PBC0.3770.0800.2580.2990.690
SN0.3930.0640.2450.3280.8300.673
SRIA0.6490.2140.6080.3570.4310.3880.406
(Source:authors’calculationusingSmartPLS3.2.9).
TheassessmentofVIFistheprerequisitefortheassessmentofthestructuralmodel
[95].TheCollinearityissueintheconstructisfixedwiththeVIFvalueslessthan5.Itcan
beseenfromTable5thatalltheconstructshaveVIFvalueswellbelow5.Afterasuccessful
assessmentofCollinearity,thestructuralmodelwastestedusingthebootstrapping
methodwithasampleof5000.

Sustainability2022,14,1137711of17
Table5.Collinearityvalues.
ATTII
COLL1.040
EC1.428
FP1.162
SRIA1.382
ATT1.143
PBC1.486
SN1.498
(Source:authorscalculationusingSmartPLS3.2.9).
ThestructuralmodelofthestudyispresentedinFigure2.
Figure2.StructuralModel.
The‘modelfit’wasconfirmedbyevaluating‘coefficientofdetermination(R2)’,
StandardizedRootMeanSquareResidual(SRMR)’,and‘NormedFitIndex(NFI)’.Q2was
checkedforthemodel’spredictiverelevance.ThesubstantialsignificanceofSEMisin
examiningthelevelofvariancetheunderlyingindependentvariableexplainsforthede
pendentvariable[90].Thevaluesofthecoefficientofdetermination(R2)areusedforthis
purpose(R2).
Inthiscurrentstudy,investmentintentiontowardsSRIistheprimedependentvari
able,andtheR2foritis0.598,whichindicatesthat59.8percentofchangeintheinvestment
intentiontowardsSRIcanbeexplainedbycollectivism,environmentalconcerns,financial
performance,SRIawareness,attitude,subjectivenorms,andperceivedbehavioralcontrol.
ThepredictiverelevanceofthemodelwasaccessedbyderivingQ2valuesbyper
formingablindfoldingprocedure.Q2valuesgreaterthan0suggestthatthemodelhas
predictiverelevanceforthe[101]andvaluesgreaterthan0.02,0.15,and0.35indicatethe
small,medium,andlargepredictiverelevanceofanindependentvariabletoadependent
variable.ThecurrentmodelhasQ2valuesof0.400(seeTable6)indicatingthatthemodel
hasalargepredictiverelevance.
Sustainability2022,14,1137712of17
Table6.Modelfitestimate.
SaturatedModel
Rsquare(R2)0.598
SRMR0.072
NFI0.833
QSquare(Q2)0.400
(Source:authors’calculationusingSmartPLS3.2.9).
TheSRMRvalueis0.072,whichislessthan0.08[95].TheNFIvalueis0.83,whichis
closerto1[102].Overall,the‘modelfit’indicesshowthatthemodelisa‘goodfit’(see
Table6).
4.ResultsandDiscussion
PathcoefficientswerecalculatedusingthebootstrapruninPLSSEM.Thisstudy
foundapositiveeffectofcollectivismonattitudetowardsSRI(β=0.193,p<0.05),and
thesefindingsareinlinewith[51,52].Therefore,weconcludethatSRIisbasedonthe
valuesystemspecificallyinthecountries,suchasIndia,withhighculturalvaluesand
beliefs.ThereisapositiveimpactofenvironmentconcernsonattitudetowardsSRI(β=
0.109,p<0.05),whichissupportedbythestudies[29,57,58,103].Thisconfirmsthateco
nomicaspirationsarealsoadrivingforceforleadingtoSRIintention.
Thus,arationalandculturedsocietyislikelytostrengthenitseffortstoensuresus
tainablehumanwellbeingasindividualsbecomemoreconsciousoftheimportanceof
theenvironmentanditslongtermimpactonsociety.ThefinancialperformanceofSRI
alsohasapositiveimpactonattitudetowardsSRI(β=0.354,p<0.05),andtheresultsare
similarto[4,29].AlthoughSRIcarriesnonmonetarygoals,iftheygeneratelucrativefi
nancialreturns,eveninvestorswithweakerSRIvalueswouldalsobecomeattractedto
suchfunds.
TheawarenessofSRIpositivelyaffectedtheattitudetowardsSRI(β=0.342,p<0.05),
andtheresultsaresupportedby[71–73].Thefinancialproductsarecomplextounder
standsoliteracyandawarenessofsuchfinancialproductswillenhancetheirinvestments
specificallyinemergingcountries,suchasIndia.TheconstructoftheTPBmodel—aswith
attitude—hasapositiveimpactontheSRIinvestmentintention(β=0.263,p<0.05)and
supportsthestudies[81,82].Asaresult,itisenvisagedthatinvestorswhohaveafavorable
attitudetowardSRIwouldhaveastrongdesiretoinvestinSRI.
PerceivedbehavioralcontrolonSRIinvestmentintentionhasapositiveimpacton
SRIinvestmentintention(β=0.487,p<0.05),whichissimilarto[78,85,86].Thisdepicts
thatperceivedbehavioralcontrolisafactorininvestingethically.Thefinalhypothesis
wastoanalyzetheimpactofsubjectivenormspositivelyaffectingtheSRIinvestmentin
tention(β=0.227,p<0.05),similartothestudies[25,84,104].Itdepictsthat,intermsof
sustainableinvestment,peergroupexpectationsandbehaviorhadasubstantialinfluence
ondecisionmaking.
FinancialperformancewasthemostsignificantvariablefollowedbySRIawareness,
whichinfluencesinvestors’attitudesregardingSRI.Perceivedbehavioralcontrolwasthe
mostsignificantvariableinfluencingtheinvestmentintentioninSRIfollowedbyattitude
andsubjectivenorms(seeTable7Standardizedregressionweight(β)values).
Table7.Structuralmodelestimates.
HypothesisImpactStandardized
RegressionWeigh(β)pValueConclusion
H1(a)COLL‐>ATT+ve0.1930.000supported
H1(b)EC‐>ATT+ve0.1090.017supported
H1(c)FP‐>ATT+ve0.3540.000supported
Sustainability2022,14,1137713of17
H1(d)SRIA‐>ATT+ve0.3420.000supported
H2ATT‐>II+ve0.2630.000supported
H3PBC‐>II+ve0.2270.000supported
H4SN‐>II+ve0.4870.000Supported
(Source:authors’calculationusingSmartPLS3.2.9).
Thestudy’sfindingsproposevaluablecontributionstowardpolicydevelopmentfor
variousstakeholders,suchasthegovernment,regulatoryauthorities,andfundmanagers.
Thefindingsofthestudyaresignificant,ascollectivismandenvironmentalconcernsnot
onlyaffecttheattitudesofinvestorsbutalsotheinvestmentintentionsofinvestors.A
balancedapproachshouldbeadoptedfordesigningandofferingthesefunds.Thestudy
hassignificantresultsshowingthatinvestmentintentionsarehighlyinfluencedbysub
jectivenormsi.e.,peergroupinfluence.Theseresultsreaffirmthatinvestorsarelesscon
fidentintheirinvestmentdecisionsandmorelikelytofollowtheadviceoftheirfriends,
family,coworkers,andacquaintances.
Financecompaniesandfinancialadvisorscanutilizetheresultstoincreasethepen
etrationofSRI.Werecommendthatfinancialadviserstakeamoreprogressiveandprac
ticalperspectivebylookingatmorethansimplydemographicsandinsteadpayingatten
tiontocharacteristics,suchasattitude,subjectivenorms,andperceivedbehavioralcontrol
beliefs.Regulatoryauthorities,fundmanagers,andtheMFcompaniesdealingwithSRI
fundscanmarkettheseinvestmentproductsbyconsideringthefindingsofthestudy.
TheycandevelopseminarstoeducateandenlighteninvestorsaboutSRIinvestments.To
preservetheinvestors’individualbeliefsonthetopicofsustainability,businessescanfo
cusonmakingtheappropriatesocialandenvironmentaldisclosuresintheirreporting
methods,whichmayalsohelptheinvestorstomakeinformedinvestmentdecisions.
5.Conclusions
Investmentshavealwaysbeencenteredonmakingaprofit,andthishasbeentrue
forcenturies.Thefocusoftraditionalinvestmentdecisionshasbeenalmostexclusivelyon
thisonefactor,attheexpenseofsocialandenvironmentalconsiderations.However,the
COVID19predicamenthighlightedonceagainhowgovernance,social,andenvironmen
talproblemsmayhavesignificanteffectsontheeconomyandsociety.Thecrisisalsoin
dicatedthatadoptingSRIisnotsomehazylongtermidealbutsomethingthatcanquickly
boosttheagilityofoursocietyandenterprises.Inthisvein,itisimportanttostudythe
factorsthatcanfurtheracceleratethegrowthofSRIinvestments.
Inthepresentstudy,weconcludedthatcollectivism,environmentalconcerns,finan
cialperformance,andawarenessaboutSRIhavesignificantpositiveeffectsonattitudes
towardSRI,which,inturn,resultedinSRIinvestmentintention.IntentiontowardSRI
investmentwasalsohighlyinfluencedbysubjectivenormsandperceivedbehavioralcon
trol.Accordingtothefindings,thesubjectivenormwasthemostsignificantpredictorof
SRIinvestmentintention,andpeerrelatives’perspectiveswereimportantindirectingsus
tainableinvestments.
ThisindirectlyemphasizesthatthereisalackofliteracyaboutSRIproductsamongst
investors,andhenceinvestorsattempttomimicthebehavioroftheirfriendsandpeers.
Inresponsetothisneed,financialinstitutionsandmutualfundcompaniesmaylaunch
educationalinitiativestohelpsaversandprospectiveinvestorslearnmoreaboutsocially
responsibleinvesting(SRI).Inaddition,theymayprovideindepthtrainingonSRIin
vestingtofinancialplannersandadvisers,whocanthenserveasadvocatesforthecause.
Thereareafewcaveatstothestudy’sfindings.First,itwasdoneatacertainperiod
intime(acrosssectionalstudy).Extendingthetimeframeoftheinvestigationisaneces
sarynextstepinthisfield’sstudy.Changesininvestors’intentionsmaybetrackedover
timebycollecting(andevaluating)dataatregularintervals.Second,althoughthisstudy’s
samplesizeissufficientfordoingstructuralequationmodeling[105],futureresearch
shouldexplorealargersampletoaccountforsamplingmistakes.
Sustainability2022,14,1137714of17
Third,thisresearchfocusedonSRIandfoundthattheattitudeandintentiontoward
theseinvestmentsareinfluencedbycollectivism,whichisinfluencedbyeachculture,and
thusthefindingcannotbeextendedtoallcultures.Fourth,thestudywasconducted
adoptingtheTPBmodel.Inthefuture,otherstudieswillincludetheStimulus–Organism–
Response(SOR)modelforadoptionintention.Lastly,thecurrentstudyfocusedonfour
factors:collectivism,environmentalconcerns,financialperformance,andSRIawareness
towardsattitudetowardSRI,whereastherearemanyotherfactorsrelatedtotheinvestor
personalityormoralvaluesthatwerenotconsideredandcanbeincludedinfuturere
search.
AuthorContributions:conceptualization,H.T.andS.S.;methodology,H.T.andH.S.R.;formalanal
ysis,S.S.andA.D.O.;writing—originaldraftpreparation,H.T.,H.S.R.,andS.S.;writing—review
andediting,D.D.B.N.andA.D.O.;resources,D.D.B.N.Allauthorshavereadandagreedtothe
publishedversionofthemanuscript.
Funding:ThisworkwassupportedbyGheorgheAsachiTechnicalUniversityofIaşi—TUIASI‐Ro
mania,ScientificResearchFunds,FCSU2022.
InstitutionalReviewBoardStatement:Ethicalreviewandapprovalwerewaivedforthisstudy.
Thestudyhasfollowedthesurveymethodandincludestheresponsesfromthesurveyparticipants
fromIndia.Hence,itfallsunderthe‘SocialScienceStudies’.AsguidedbyIndianCouncilofSocial
ScienceResearch(ICSSR),suchstudiesneednottofollowtheethicalguidelines.Forthecurrent
study,alltheparticipantswerefullyinformedabouttheaimofthestudyandwereassuredthe
anonymityoftheresponses.Theywerealsoinformedtheusageofthedatatheyagreedtoprovide.
Thereisnoprivateinformationcollectedfortheresearchcontext.Noobservationdataorrecordings
hadtakenplace,whichcanbemadepublic.Alltheethicalstandardshavebeenfollowedforreport
ingthecollecteddatawithnomisrepresentationofinformationanddata.Fromtheresearchers’side
theauthorswerenotbiasedregardingprocessingofthedata.
InformedConsentStatement:Informedconsentwasobtainedfromallsubjectsinvolvedinthe
study.
DataAvailabilityStatement:Notapplicable.
ConflictsofInterest:Theauthorsdeclarethattheyhavenoconflictofinterest.
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