The Impact of ESG Reporting on Investment Decisions with Respect to Investor Perception on Capital Markets

Abstract

This study investigates the impact of Environmental, Social, and Governance (ESG) reporting on investment decisions within the Indian capital market. With rising global emphasis on sustainability, Indian investors are increasingly factoring in ESG disclosures. The research evaluates awareness, perception, and behavioral influence among retail and institutional investors. Using a structured survey of 200 respondents, the study applies descriptive statistics, chi-square tests, and CFA to analyze data. Findings reveal that mid-career professionals and educated investors show higher ESG sensitivity. Institutional investors prioritize ESG for risk mitigation, while retail investors are guided by personal values. Strong ESG disclosures enhance investor trust and capital allocation. However, inconsistent standards and green washing limit trust. The results suggest ESG is transitioning from compliance to a strategic differentiator in India.