The Effect Of ESG Disclosure And Sustainable Practices On Investor Decision Making In Indian Textile Industry

Abstract

This study investigates the impact of ESG (Environmental, Social, and Governance) disclosure and sustainable practices on investor decision-making in India’s textile industry. With growing global emphasis on responsible investment, the research seeks to understand whether awareness of ESG factors among investors influences their capital allocation decisions. The textile sector, known for its substantial environmental and social footprint, provides a relevant backdrop for this inquiry. The study employs a quantitative approach using data collected from 180 respondents with diverse educational backgrounds. Statistical analyses including ANOVA, Pearson correlation, linear regression, and Structural Equation Modeling (SEM) were used to examine relationships between awareness of ESG disclosure, sustainable practices, and their influence on investment behavior. The findings reveal that investors with higher educational qualifications exhibit significantly greater awareness of ESG disclosures and sustainable practices. There is a statistically significant positive correlation between awareness levels and the impact ESG scores have on investment decisions. Notably, awareness of industry-specific sustainable practices demonstrates a stronger influence on investment decisions than general ESG disclosure. While the regression model explains a modest portion of the variance, the results underscore the growing relevance of ESG awareness in shaping investment behavior. This study highlights the need for improved ESG communication by textile firms and the importance of investor education to promote sustainability-driven investment strategies.