THE BEHAVIOR RISK BIASES AND SUSTAINABLE INVESTMENT DECISION

Abstract

This study explores how economic, environmental, social, and governance (EESG) factors have a role in investment decision-making as a part of sustainable business practices (SBP). The study investigates the interaction between SBP and investors' three key behavioral risk biases: risk perception, risk-taking propensity, and loss aversion. The study aims to uncover characteristics of private investors that prioritize sustainability above return and assess the degree to which they are prepared to forego returns in favor of a more sustainable investment fund by evaluating the personality traits of investors. The study employs a questionnaire to collect new data from individuals who have invested in the stock market in Pakistan. The study used the PLS-SEM analytical bootstrapping approach to assess the study hypotheses and smart PLS for data analysis. The findings reveal a significant link between investor behavior, risk aversion, and particular investment decisions, supported by data on validity, discriminant validity, convergent validity, reliability, assessment measurement model, and structural model. The study's findings will help businesses looking for funding and investors understand how SBP affects investment decisions. This study provides a deeper understanding of how sustainable practices affect investment decisions by illuminating the complex interactions between EESG factors, SBP, and investor behavior.