Drivers of socially responsible investment in Malaysia: An extended theory of planned behaviour perspective

Abstract

This research examines the drivers that navigate investors towards investing in socially responsible investments (SRI) in Malaysia, focusing on their objectives and processes of making decisions. In investing, investors more than often face challenges in combining the potential for financial gains and the ethical aspects associated with SRI, which can mainly relate to the perceived risk of lack of performance and awareness of available SRI solutions. Considering Malaysia’s current economic and regulatory environment which is characterised by an increasing interest in environmental sustainability and Islamic finance principles, this study is motivated to examine whether Malaysian investors are driven towards SRI and the factors that influence this investment behaviour. A survey-based approach was utilized to collect data from approximately 202 investors in Malaysia, assuring a varied representation of various demographics. Using Google forms, the data was collected from various investor portals, for instance, the Facebook Investor Club, allowing for a thorough examination of SRI intentions and the factors that affect it. To analyze the data and measure the relationships between the constructs in the model, the IBM SPSS Statistics software and the Smart partial least squares-structural equation modelling was deployed. The findings show that moral norms, environmental concerns, and financial knowledge meaningfully clarify investors intention towards SRI, while attitude, subjective norms, perceived behavioural control, and perceived performance failed to explain this intention. These findings have important implications for policymakers, financial institutions, and other stakeholders working to promote sustainable investment practices in Malaysia.