Beyond awareness: How perceived benefits, risk and trust shape Indian investors' preference and intention toward green investments

Abstract

Sustainable finance has expanded rapidly in India, yet retail uptake of green investments remains uneven, and little is known about the behavioural factors that shape preference for green over conventional options. This study examines how awareness, perceived benefits, perceived risk and trust influence investment preference, and how that preference translates into behavioural intention to invest in green financial products. Drawing on behavioural finance and ESG literature, a structured questionnaire was administered online to a convenience sample of 250 individual investors, and the proposed model was tested using partial least squares structural equation modelling in SmartPLS. The measurement model met reliability and validity criteria, and model fit was acceptable (SRMR of 0.062 for the saturated model and 0.074 for the estimated model). Perceived benefits (β = 0.329) and trust (β = 0.269) increased investment preference, while perceived risk reduced it (β = 0.244, negative). Awareness had no significant direct effect (β = 0.107, p = 0.128). Investment preference strongly predicted behavioural intention (β = 0.624), consistent with a mediating role for preference, and the model explained 40.8% of the variance in preference and 38.7% in intention. The findings indicate that knowing about green investments is not enough, and that perceived value, credible ESG disclosure and lower perceived risk matter more. The study adds evidence from an emerging market to behavioural finance and sustainable investing research and offers guidance for policymakers, financial institutions and ESG practitioners.