Analysis of Factors Influencing Green Investment Decisions with Green Awareness as a Moderating Variable
DOI:
https://doi.org/10.52103/jms.v7i1.2308Keywords:
Perceived Risk, Perceived Financial Benefit, Perceived Trust, Perceived Greenwashing, Green Investment DecisionsAbstract
This study aims to analyze the factors that influence decision making in green investment, such as perceived risk, perceived financial benefit, perceived trust, and perceived greenwashing, as well as green awareness as a moderating variable. Using an online survey method, 270 individual respondents with the potential to be involved in investment activities, specifically in green investment instruments, were selected. The collected data were analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to assess the relationships between variables and the moderating effect of green awareness. The results show that perceived trust and perceived financial benefits have a positive and significant influence on green investment decisions. However, perceived risk and perceived greenwashing have insignificant influence on green investment decisions. Green awareness has moderated the relationship of perceived trust on investment decisions. However, the direction of the relationship was negative, indicating that individuals with high environmental awareness tend to be more critical and do not rely solely on trust in decision-making. This study contributes to the literature by examining green investment from an individual behavioral perspective, integrating various perception-based factors, and introducing green awareness as a moderating variable in the Indonesian context. Public companies should focus on creating real green impact on society because trust becomes weaker when green awareness is high. For example, emission data, carbon reduction, and clear sustainability disclosure in reports can increase investors’ intention to invest in green investments. Second, regulators can strengthen the monitoring of green practices and the transparency of sustainability reports. Investors need to align their investment decisions with their personal sustainability goals, not only based on reputation or trust in institutions.
References
Addo, J. O., Cúg, J., Keelson, S. A., Amoah, J., & Petráková, Z. (2025). Behavioral Risk Management in Investment Strategies: Analyzing Investor Psychology. International Journal of Financial Studies, 13(2). https://doi.org/10.3390/ijfs13020053
Agustin, I. N., Candy, C., & William, J. (2025). From green claims to market crashes: the moderating forces of climate risk. Journal of Capital Markets Studies, 9(2), 151–168. https://doi.org/10.1108/JCMS-06-2025-0069
Ajzen, I. (2020). The theory of planned behavior: Frequently asked questions. Human Behavior and Emerging Technologies, 2(4), 314–324. https://doi.org/10.1002/hbe2.195
Aliedan, M. M., Alyahya, M. A., Elshaer, I. A., & Sobaih, A. E. E. (2023). Who is going green? determinants of green investment intention in the Saudi food industry. Agriculture (Switzerland), 13(5). https://doi.org/10.3390/agriculture13051047
Almansour, B. Y., Elkrghli, S., & Almansour, A. Y. (2023). Behavioral finance factors and investment decisions: A mediating role of risk perception. Cogent Economics and Finance, 11(2). https://doi.org/10.1080/23322039.2023.2239032
Anisah, N., & Puspasari, R. (2024). Sistem informasi kuesioner materi pembelajaran SMP Swasta Generasi Bangsa Martubung menggunakan skala likert. Jurnal Rekayasa Sistem (JUREKSI), 2(2), 604–616.
Apostolopoulos, N., Makris, I., Deirmentzoglou, G. A., & Apostolopoulos, S. (2025). The impact of greenwashing awareness and green perceived benefits on green purchase propensity: The mediating role of green consumer confusion. Sustainability (Switzerland), 17(14). https://doi.org/10.3390/su17146589
Aziz, S., Azam, N., Alias, Z., Khan, N. U., & Bazakiaei, H. A. (2021). Do brand familiarity, perceived trust and attitude predict stock investment decision behavior? Academy of Strategic Management Journal, 20(6), 1–12.
Chan, K. H., Chong, L. L., Ng, T. H., & Ong, W. L. (2022). A model of green investment decision making for societal well-being. Heliyon, 8(8). https://doi.org/10.1016/j.heliyon.2022.e10024
Chen, H., Bernard, S., & Rahman, I. (2019). Greenwashing in hotels: A structural model of trust and behavioral intentions. Journal of Cleaner Production, 206, 326–335. https://doi.org/10.1016/j.jclepro.2018.09.168
Cuandra, F., Susanto, S., Hesniati, H., & Candy, C. (2024). Deciphering investment decision in fintech: The role of behavioral bias and risk perception. Jurnal Organisasi Dan Manajemen, 20(2), 271–286. https://doi.org/10.33830/jom.v20i2.8248.2024
Dempere, J., Alamash, E., & Mattos, P. (2024). Unveiling the truth: greenwashing in sustainable finance. In Frontiers in Sustainability (Vol. 5). Frontiers Media SA. https://doi.org/10.3389/frsus.2024.1362051
Gacem, S., Hervé, F., & Marsat, S. (2025). When green turns red: Is the perception of greenwashing a barrier to individual green investment? Finance Research Letters, 82. https://doi.org/10.1016/j.frl.2025.107605
Garg, A., Goel, P., Sharma, A., & Rana, N. P. (2022). As you sow, so shall you reap : Assessing drivers of socially responsible investment attitude and intention. Technological Forecasting & Social Change, 184. https://doi.org/10.1016/j.techfore.2022.122030
Garg, D., Tiwari, P., & Jain, V. K. (2024). Do social media sentiments affect investment decisions ? A moderated mediation analysis of the relationship between social media sentiments , trust , and investment decisions. Global Business and Economics Review. https://doi.org/10.1504/GBER.2024.10058158
Hagger, M. S., & Hamilton, K. (2025). Progress on theory of planned behavior research: advances in research synthesis and agenda for future research. Journal of Behavioral Medicine, 43–56.
Hair, J. F., Hult, G. T., Ringle, C., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). In Sage (2th Editio). SAGE Publications, Inc.
Heeb, F., Kölbel, J. F., Paetzold, F., & Zeisberger, S. (2023). Do Investors Care about Impact? Review of Financial Studies, 36(5), 1737–1787. https://doi.org/10.1093/rfs/hhac066
Herve, F., & Marsat, S. (2024). Acting for good , being good or feeling good ? Exploring factors influencing individual investors ’ willingness to invest in green funds. Finance Research Letters, 67(June). https://doi.org/10.1016/j.frl.2024.105736
Hesniati, H., Phangestu, S. J., Marheni, D. K., & Arviano, H. (2025). Navigating Digital Credit : How Risky Indebtedness Behavior and Impulsive Buying Shape Buy-Now-Pay-Later Intention ? Journal of Theoretical and Applied Management, 18(3), 275–290. https://doi.org/https://doi.org/10.20473/jmtt.v18i3.77543
Hildebrand, C., & Bergner, A. (2021). Conversational robo advisors as surrogates of trust: Onboarding experience, firm perception, and consumer financial decision making. Journal of the Academy of Marketing Science, 49(4), 659–676. https://doi.org/10.1007/s11747-020-00753-z
Hong, X., Pan, L., Gong, Y., & Chen, Q. (2023). Robo-advisors and investment intention: A perspective of value-based adoption. Information and Management, 60(6). https://doi.org/10.1016/j.im.2023.103832
Honold, S. E., & Oh, N. (2025). The influence of personality traits and demographic factors on cryptocurrency investment decisions. Personality and Individual Differences, 241. https://doi.org/10.1016/j.paid.2025.113189
Hu, D., & Gan, C. (2024). Green finance development and its origin , motives , and barriers : an exploratory study.
Husin, M. M., Aziz, S., & Bhatti, T. (2022). The impact of brand familiarity , perceived trust and attitude on investors ’ decision-making in Islamic stock market. Journal of Islamic Marketing. https://doi.org/10.1108/JIMA-04-2020-0093
Islam, K. U., Bhat, S. A., Lone, U. M., Darzi, M. A., & Malik, I. A. (2024). Financial risk propensity and investment decisions: An empirical analysis using behavioural biases. IIMB Management Review, 36(3), 213–229. https://doi.org/10.1016/j.iimb.2024.06.004
Jain, J., Walia, N., Singla, H., Singh, S., Sood, K., & Grima, S. (2023). Heuristic biases as mental shortcuts to investment decision-making: A mediation analysis of risk perception. Risks, 11(4), 1–22. https://doi.org/10.3390/risks11040072
Javed, A., Usman, M., & Rapposelli, A. (2024). Transition toward a sustainable future : Exploring the role of green investment , environmental policy , and financial development in the context of load capacity factor in G-7 countries. Sustainable Development, 1589–1609. https://doi.org/10.1002/sd.3192
Kang, H. (2021). Sample size determination and power analysis using the G*Power software. Journal of Educational Evaluation for Health Professions, 18, 1–12. https://doi.org/10.3352/JEEHP.2021.18.17
Kantorowicz, J., Collewet, M., DiGiuseppe, M., & Vrijburg, H. (2024). How to finance green investments? The role of public debt. Energy Policy, 184. https://doi.org/10.1016/j.enpol.2023.113899
Kulal, A., Rahiman, H. U., Panakaje, N., Parvin, S. M. R., Kambali, U., K., M., & N., A. (2024). Impact of trust-building strategies on investment decisions: Mediating role of the financial advisor-client relationship. Investment Management and Financial Innovations. https://doi.org/10.21511/imfi.21(4).2024.20
Kwilinski, A. (2024). Mapping Global Research on Green Energy and Green Investment: A Comprehensive Bibliometric Study. In Energies (Vol. 17, Issue 5). Multidisciplinary Digital Publishing Institute (MDPI). https://doi.org/10.3390/en17051119
Lathief, J. T. A., Kumaravel, S. C., Velnadar, R., Vijayan, R. V., & Parayitam, S. (2024). Quantifying risk in investment decision-making. Journal of Risk and Financial Management, 17(2). https://doi.org/10.3390/jrfm17020082
Lee, W., Park, Y., & Han, H. (2024). A Study on the revenge travel intention in the endemic era: using the theory of planned behavior and heuristic cues. Sustainability (Switzerland), 16(15), 1–11. https://doi.org/10.3390/su16156577
Lestari, E. R., Septifani, R., & Nisak, K. (2021). Green awareness and green purchase intention: The moderating role of corporate image. IOP Conference Series: Earth and Environmental Science, 924(1). https://doi.org/10.1088/1755-1315/924/1/012051
Li, R., & Li, H. (2024). The impact of food packaging design on users’ perception of green awareness. Sustainability (Switzerland), 16(18). https://doi.org/10.3390/su16188205
Liu, M., Zhu, J., Yang, X., Chen, D., & Lin, Y. (2024). From green awareness to green behavior: The impact of information disclosure scenarios on greener shopping channel choices. Sustainability (Switzerland), 16(18). https://doi.org/10.3390/su16187944
Lopes, J. M., Silva, L. F., Massano-Cardoso, I., & Galhardo, A. (2024). Green purchase determinants in a peripheral region of Europe: How can green marketing influence consumers’ decisions? The mediating role of green awareness of price. Administrative Sciences, 14(11), 1–24. https://doi.org/10.3390/admsci14110293
Mahmood, F., Arshad, R., Khan, S., Afzal, A., & Bashir, M. (2024). Impact of behavioral biases on investment decisions and the moderation effect of financial literacy; an evidence of Pakistan. Acta Psychologica, 247. https://doi.org/10.1016/j.actpsy.2024.104303
Marti, E., Fuchs, M., Desjardine, M. R., Slager, R., & Gond, J.-P. (2024). The impact of sustainable investing : A multidisciplinary review. Journal of Management Studies, July. https://doi.org/10.1111/joms.12957
Millet, K., & Weijters, B. (2023). The behavioral intervention " positive cueing ": Altering self-perception , increasing green awareness , or undermining the signaling value of costly green behavior? Journal of Environmental Psychology. https://doi.org/10.1016/j.jenvp.2023.101979
Mishra, A. K., Bansal, R., & Maurya, P. K. (2023). Investing for a better tomorrow: Values-driven antecedents of investment in socially responsible equity funds by Indian retail investors. Journal of Cleaner Production, 420. https://doi.org/10.1016/j.jclepro.2023.138441
Nuryanto, U. W., Basrowi, Quraysin, I., & Pratiwi, I. (2024). Harmonizing eco-control and eco-friendly technologies with green investment: Pioneering business innovation for corporate sustainability in the Indonesian context. Environmental Challenges, 15(May), 100952. https://doi.org/10.1016/j.envc.2024.100952
Piotrowska, A. I., & Piotrowski, D. (2025). Green fintech: A consumer awareness study. Sustainability, 1–18.
Rohith N R, & Patil, H. (2025). Assessing investor perception of risk and return in green finance products: a study on sustainable investment decision making. International Journal of Research -GRANTHAALAYAH, 13(7). https://doi.org/10.29121/granthaalayah.v13.i7.2025.6137
Salem, A. M., Eyupoglu, S. Z., & Ma’aitah, M. K. (2024). The influence of machine learning on enhancing rational decision making and trust levels in e-government. Systems, 12(9), 1–21. https://doi.org/10.3390/systems12090373
Scheller, F., Morrissey, K., Neuhoff, K., & Keles, D. (2024). Green or greedy: the relationship between perceived benefits and homeowners’ intention to adopt residential low-carbon technologies. Energy Research and Social Science, 108. https://doi.org/10.1016/j.erss.2023.103388
Siemroth, C., & Hornuf, L. (2023). Why Do Retail Investors Pick Green Investments? A Lab-in-the-Field Experiment with Crowdfunders. Journal of Economic Behavior and Organization, 209, 74–90. https://doi.org/10.1016/j.jebo.2023.02.023
Strauß, N., Krakow, J., & Chesney, M. (2023). It’s the news , stupid! The relationship between news attention , literacy , trust , greenwashing perceptions , and sustainable finance investment in Switzerland. Journal of Sustainable Finance & Investment, 13. https://doi.org/10.1080/20430795.2023.2226792
Sukumaran, S., Bee, T. S., & Wasiuzzaman, S. (2022). Cryptocurrency as an investment : The Malaysian context. MDPI, 10(4).
Tian, J., Sun, S., Cao, W., Bu, D., & Xue, R. (2024). Make every dollar count: The impact of green credit regulation on corporate green investment efficiency. Energy Economics, 130. https://doi.org/10.1016/j.eneco.2024.107307
Tu, J. C., Cui, Y., Liu, L., & Yang, C. (2024). Perceived Greenwashing and Its Impact on the Green Image of Brands. Sustainability (Switzerland), 16(20). https://doi.org/10.3390/su16209009
Tufail, S., Alvi, S., Hoang, V. N., & Wilson, C. (2024). The effects of conventional and unconventional monetary policies of the US, EU, and China on global green investment. Energy Economics, 134. https://doi.org/10.1016/j.eneco.2024.107549
Vilkaitė-Vaitonė, N. (2024). The greenwashing trap: how misleading marketing affects consumer green purchasing habits. Business: Theory and Practice, 25(2), 593–602. https://doi.org/10.3846/btp.2024.21204
Wang, C., Wang, H., Li, Y., Dai, J., Gu, X., & Yu, T. (2025). Factors influencing university students’ behavioral intention to use generative artificial intelligence: Integrating the theory of planned behavior and AI literacy. International Journal of Human-Computer Interaction, 41(11), 6649–6671. https://doi.org/10.1080/10447318.2024.2383033
Wang, L., Feng, X., & Zang, L. (2024). Does risk perception influence individual investors ’ crowdfunding investment decision-making behavior in the metaverse tourism? Finance Research Letters, 62. https://doi.org/10.1016/j.frl.2024.105168
Wasiuzzaman, S., & Ahmad, A. M. S. L. P. H. (2025). Perception towards government advisory , perceived risk and willingness to invest in cryptocurrency. Journal of Economics and Business, 133, 106208. https://doi.org/10.1016/j.jeconbus.2024.106208
World Bank. (2024). Green Bonds. In World Bank Treasury.
Xu, M., Tse, Y. K., Geng, R., Liu, Z., & Potter, A. (2025). Greenwashing and market value of firms : An empirical study. International Journal of Production Economics, 284. https://doi.org/10.1016/j.ijpe.2025.109606
Ye, J., & Dela, E. (2023). The Effect of Green Investment and Green Financing on Sustainable Business Performance of Foreign Chemical Industries Operating in Indonesia: The Mediating Role of Corporate Social Responsibility. Sustainability (Switzerland), 15(14). https://doi.org/10.3390/su151411218
Zhang, X., & Huang, C. H. (2024). Investor characteristics, intention toward socially responsible investment (SRI), and SRI behavior in Chinese stock market: The moderating role of risk propensity. Heliyon, 10(14). https://doi.org/10.1016/j.heliyon.2024.e34230.
