Understanding Investor Attitudes and Green Investment Behaviour – Evidence from Sri Lankan Green Investors

Abstract

Green investment is now a buzzword that is strongly associated with sustainable development, yet investor engagement in green investment is seen as relatively poor, particularly in developing countries such as Sri Lanka. While there is burgeoning research on green consumerism and its antecedents, there appears to be little research on understanding green investment behaviour and its drivers. The present study thus investigates investor attitudes and green investment behaviour by drawing on green consumerism related antecedents by focusing on four key dimensions of investor attitudes: environmental consciousness, environmental responsibility, health consciousness, and social influence. The study collected quantitative data through a structured questionnaire from 399 current and prospective green investors across Sri Lanka. Findings revealed a strong positive correlation between these attitudinal drivers and the willingness to invest in green projects. Social influence emerged as the most significant variable, suggesting a herd mentality as well as social pressure with regard to green investments. Moreover, a gender-based difference was also observed, with male investors exhibiting a greater inclination toward green investments, often driven by potential financial benefits rather than purely environmental concerns. The findings also corroborate with ongoing global challenges related to green investments, such as insufficient returns, lack of risk mitigation tools, and weak market participation. Such findings thus underscore the need for innovative policy solutions such as green credit guarantees, community trust funds, and expanded roles for financial institutions to improve investor confidence. This research adds originality by examining individual investor behaviour in a developing market context, offering valuable insights for financial institutions and policymakers aiming to foster green investment through targeted strategies.