Perception on Investing in Stocks with ESG Relevance: A Descriptive View on Influence of Key Demographic Variables and Risk Profiling of Investors

INTRODUCTION: To be purposeful beyond the return consideration by the way of giving importance to environment, society and governance of company through investing in companies that give priority to aforementioned factors by investors and their perception towards ESG is the crux of this research paper. For this several factors that measures the environment, social and governance are itemized and considered as the dependent variable. OBJECTIVES: To know whether the influences of the three risk-acceptance levels on environment, social and governance factors were different based on selected demographic variables METHODS: Some of the key demographic variables like Age range, Annual income and Employment status are taken as independent variables with another key variable the tolerance towards risk of the investors. The individual and interactive effect of the demographic variable along with the key variable (risk tolerance) in manipulating the effects over the dependent variables (ESG) in the key concept of discussion in this research. The research was conducted through a structured questionnaire among the investors in Chennai region of Tamilnadu (India). Data was analyzed through SPSS and the tool used to explain the purpose of the research was MANOVA. RESULTS: All the three demographic variables considered in the research had a significant influence over the risk tolerance of the investors in manipulating the considerations over the ESG factors. CONCLUSION: All the three demographic variables considered in the research had a significant influence over the risk tolerance of the investors in manipulating the considerations over the ESG factors.


Introduction & Theoretical Background
The phrase "sustainable investment" refers to a variety of tactics employed by investors to increase long-term environmental or social value while maximising profits.Investors have been able to conduct more extensive analyses and make better investment decisions by integrating conventional investment methods with "Environmental, Social, and Governance (ESG)" related factors [1].
Traditional profit-driven businesses now show a great deal of concern in considerate and handling the wider implications of their activities.Yet, efforts to address societal issues alike poverty, discrimination, and climate transformation by "businesses, nongovernmental organisations NGOs, and governments" have so far been ineffective.Sustainable investing has evolved into a potential remedy for social and conservation issues by making the financial marketplaces more liable for such effects [2].Added investors today anticipate that their savings will replicate these greater beliefs and provide answers to greater concerns.This creates a chance for sustainable or value-creating investments.The concept of ESG investing, takes into description the environmental issues, social issues, and governance related issues and its factors when making investment decisions.The theoretical foundations of ESG investing and examines the empirical evidence of the influence of E-S-G factors on investment performance [3].The affiliation between Corporate-Social-Responsibility (CSR) and financial outcome was explored and examined.The theoretical and experiential proof of the impact of CSR on financial outcomes explores the potential implications for sustainable investing [4].The affiliation amongst corporate sustainability and organizational outcome was examined and it was argued that the firms that give more importance to sustainability are further likely to modernize, improve operational efficiency, appeal and retain employees, which may be prime to better financial performance [5].The effectiveness of socially responsible marketing strategies is explored and it was argued that companies that encompass in socially responsible marketing can progress their reputation and customer loyalty, but that these tactics may be not as much of effective for firms that have a past of immoral behavior [6].The influence, trades have over the surroundings has progressively been provided extra significance by an affluence of collected works due to the noticeable, influential effect on biodiversity, the mutilation to nature, and fast-tracked "global warming" triggered by corporates.Therefore, businesses with righteous environmental approaches can give confidence to the compeers of equitable and justifiable financial yields, together with pleasing their environmental liabilities.Quite a lot of prior studies have accepted the connection amongst environmental phases and investment administrative process, for specimen in the United States, Japan, India from Asia, France from Europe, and Australia.Investors in the United states articulated that appraisal of environmental disputes helps them review a companies' socially accountable conduct [7].The survey suggests that governance rests the vital subject of the majority investor, dealer, and commercial experts matched to social and ecological standards [8].Similarly, it was asserted that normal investors orders financial outcome as first factor, control mechanism as second factor, and last of all, a firm's commitment to society and environment [9].The enhanced authority contrivance is in the search of wholesome financial reasonableness, but when it progresses its social and ecological outcome, this is undoubtedly further headed for sustainability.Sustainable and finance, both involve conflicting influences on investor risk forbearance and asset apportionment choice.Former readings follow on view that investors primarily concentrate on supremacy and heeds a minimum attention to ecological and social data.Yet, a fresh inclination of communally accountable investment and stakeholder involvement has refreshed the connotation of ecological and societal data to make complete investment choice [10].It was proclaimed that social concerns stay more important than environmental concerns for socially liable investors.In line with this argument, it is acknowledged that distinct investor does not likewise give importance to E-S-G magnitudes and governance continue be prudent to develop asset apportionment result than ecological and social aspect [11].Similarly, it is also inferred grounded on earlier writings that ecological data has further exactitude and application to asset apportionment results than social evidence [12].The variations in sub-classification ratings of G-R-I (namely, human rights, economic, products, labor, governance, society, and environment), display a minor but substantial impact on the stock's outcome during narrow periods or on narrow sectors, which contrasts midst the countries [13].E-S-G and organizations outcome-Attempting the E-S-G exemplar's tender in relations of strong outcome means considerate the influence of modernization on organizations' financial and eco-friendly outcomes.Green novelty, for instance, can be appreciated as all those carry out lead to better eco-friendly novelty that inspect the association between carbon releases and financial outcome.Undeniably, green invention is an vital driver, having a substantial effect on organizations' financial and ecofriendly outcomes: financing in green improvement lessens carbon emissions (CO2) and expands financial performance [14].ESG needs establishments and commerce to study their ecological impacts, how a business delights and values their personnel, and the philosophies and strategies an entity uses to make choices.ESG has turn out to be a pivotal argument with shareholders and financial establishments as many shareholders are looking at businesses to speak microclimate and macroclimate transformation and how corporations should be carrying out on a moral basis [15]..

Objectives
To know whether the influence s of the three riskacceptance levels on environment, social and governance factors were different based on selected demographic variables.The crucial aim is to decide whether there is a statistically significant interface effect.

Sample frame
Sample frame consists of investors from Chennai either having an idea over sustainable investment or invested in stocks in companies giving priority over sustainability.A structured questionnaire was used to collect the responses which possibly included factors detailing the environment, social and environmental considerations.A total of 201 sample were considered after rejecting the outliers and missing values.

Conclusion
Investors perception towards the ESG parameters based on their demographic factors and risk profile was investigate in this research.And it was concluded that the influence of the three risk acceptance levels on environment, social and governance factors were different for various age groups, the influence of the three risk acceptance levels on environment, social and governance factors were different for various range of annual income, except employment status over the environment factor which was insignificant.And finally the influence of the three risk acceptance levels on environment, social and governance factors were different for various groups of employment status.Overall all the three demographic variables considered in the research had a significant influence over the risk tolerance of the investors in manipulating the considerations over the ESG factors.

Scope of further research
Even though the research paper was tried to attempt and include as many factors under consideration to measure the environment, social and governance related factors, still there is ample scope of including more variables.To give more generalization the research can be expanded to other major cities and more sample size.Can be further researched with more demographic variables.Post-hoc test and more interactive effects between the variables can be explored and studied.Same research can be conducted as a longitudinal study to know the variations over time.

Table 1 :
Variables H0(Null): The influence of the three risk acceptance levels on environment, social and governance factors were same for various sub-classifications in selected demographic variables.(insignificant) H1a(Alternate): The influence of the three risk acceptance levels on environment, social and governance factors were different for various age groups.(significant) H2b(Alternate): The influence of the three risk acceptance levels on environment, social and governance factors were different for various range of annual income.(significant) H3c(Alternate): The influence of the three risk acceptance levels on environment, social and governance factors were different for various groups of employment status.(significant)

Table 2 :
Demographic variable frequencyMore respondents belong to the young age category falling less than 35 years of age.Annual income maximum frequency lies between 4 and 8 lakhs and most of the investors employment status is full time.To explore more in the annual income perspective, being the most important factor in deciding the investment capacity, annual income is classified into two sub sets based on Tukey's score.On environmental considerations income category of 4 to 8 lakhs and more than 8 lakhs have similar approaches.On social considerations income category of less than or equal to 8 lakhs categories have similar approaches.On governance considerations income category of less than or equal to 8 lakhs categories have similar approaches.

Table 3 :
Tukey's test EAI Endorsed Transactions on Energy Web Volume 10 | 2023

Table 4 :
Multivariate Tests for Risk tolerance and Annual income: Design: Intercept + Risk Tolerance level + Annual income + Risk tolerance level * Annual income A.Pillai's Trace; B. Wilks' Lambda; C. Hotelling's Trace; D. Roy's Largest Root Source: Primary data

Table 5 :
Tests of Between-Subjects Effects for Risk tolerance and Annual income

Table 6 :
Multivariate Tests for Risk tolerance and Employment status Primary data p value of 0.000(i.e)Wiki;s Lambda, reflects there is noteworthy collaboration effect.This means the effect of Risk tolerance on the dependent variables (ESG factors) is not same for the various categories of employment.

Table 7 :
Tests of Between-Subjects Effects for Risk tolerance and Employment status Risk tolerance level and Age range in the model, additionally the model completely, is verified for its capability to account for deviation in the Environment, Social and Governance factors.The significance value of each of all the factors say environment, social and governance, is less than 0.05.Therefore, each term is statistically significant.R square of approximately 0.70 means that the 70% of the variance in outcome variable (Environment, Social and Governance) is explained by the model (Age range, Risk tolerance level and Age range*Risk tolerance level).