DefinePK

Abstract

As people around the world become more aware of systemic issues that we are currently facing, the implementation of the ESG framework becomes more prominent for the development and sustainability of a company, especially in optimizing profit and acquiring investors. This study was conducted in order to investigate the potential impact of ESG awareness on an investor’s decision-making process. We acquire 106 respondents that participate in our online investment survey. By incorporating the use of the Ordered Logistics Regression Model, we found that ESG awareness strongly affects investment decisions. The findings of this study suggest that Indonesian investors are aware of current ESG issues; Indonesian investors believe that ESG factors are essential and important matters for their investment; and Indonesian investors tend to invest more in a company that has a higher ESG performance value. Moreover, we also found that social issues are the leading ESG factors for Indonesian investors due to the social and political climate of Indonesia. This study contributes to the development of studies on ESG, sustainability, and investment behavior in Indonesia that still in the early stages of development and implementation.
Keywords: ESG, Investment Decision, Investment Behavior, Corporation, Indonesia.