Behavioural Finance and Ethical Investing

1. Auflage 2026
ISBN: 978-1-041-16180-6
Verlag: Taylor & Francis Ltd

Buch, Englisch, 238 Seiten, Format (B × H): 156 mm x 234 mm

Reihe: Routledge International Studies in Money and Banking

Contextualising the effective and ineffective approaches to Environmental, Social, and Governance (ESG) implementation across the globe from a behavioural finance perspective, this book covers a range of considerations that must be made when firms choose the sustainable path.

The book begins with a critical examination of ESG investing and assumption that they consistently deliver superior financial returns. It then explores how cognitive distortions, incorrect information, and technological innovations may impact ethically motivated investors, leading them to make choices that are behaviourally vulnerable if not irrational. The book looks at established and emerging markets in diverse regions such as Asia, Europe and the US to discuss prevailing market narratives that may influence investor decisions. It also presents empirical insights from 400 survey respondents and 50 interview participants in emerging markets, highlighting how investment thinking continues to be shaped by local norms and environments.

The book highlights the importance of context-specific engagement and provides practical suggestions on how to promote more rational ESG investing. This book will be of use to courses on behavioural finance, sustainable investing, and ESG in Finance.

Zielgruppe

Postgraduate and Undergraduate Advanced

Autoren/Hrsg.

Ooi, Kok Loang

Aziz, Norazlin Binti Ab

Lau, Wee Yeap

Fachgebiete

• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Anlagen & Wertpapiere
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Finanzsektor & Finanzdienstleistungen: Allgemeines
• Wirtschaftswissenschaften Volkswirtschaftslehre Volkswirtschaftslehre Allgemein Verhaltensökonomik
• Wirtschaftswissenschaften Betriebswirtschaft Management Entscheidungsfindung
• Sozialwissenschaften Psychologie Allgemeine Psychologie Sozialpsychologie
• Wirtschaftswissenschaften Volkswirtschaftslehre Internationale Wirtschaft Entwicklungsökonomie & Emerging Markets
• Geowissenschaften Umweltwissenschaften Nachhaltigkeit
• Wirtschaftswissenschaften Betriebswirtschaft Management Risikomanagement

Inhaltsverzeichnis

About the Authors

Abstract

Funding

Preface

Acknowledgement

CHAPTER 1: RETHINKING ESG: IDEALS, REALITIES, AND BEHAVIORAL VULNERABILITIES

· 1.1 Introduction: Deconstructing the ESG Ideal

· 1.2 From Rationality to Reflex: Theoretical and Behavioural Grounding

· 1.3 ESG in Action: Global Illustrations of Ethical Inconsistency

· 1.4 Survey Reflections: What Investors Say vs. What They Do

· 1.5 Narrowing the Gap: Policy, Strategy, and Psychological Realism

· 1.6 Conclusion: Rethinking ESG through a Behavioral Lens

CHAPTER 2: PROFITABILITY VERSUS PRINCIPLE: THE FINANCIAL TRADE-OFFS IN ESG INVESTING

· 2.1 Introduction: Rethinking the ESG Payoff

· 2.2 Literature and Theory: ESG Returns Through a Behavioral Lens

· 2.3 Global Tensions: Ethical Branding and Financial Reality

· 2.4 What the Data Shows: ESG Beliefs vs. Investment Actions

· 2.5 Closing the Gap: Practical Interventions and Policy Tools

· 2.6 Conclusion: Beyond the ESG Narrative

CHAPTER 3: THE TRUMP EFFECT AND ESG BACKLASH: POLITICAL RISKS AND MARKET REACTIONS

· 3.1 Introduction: Unmasking the Political Vulnerability of ESG

· 3.2 When Regulation Reverses: Political Economy and Behavioural Finance

· 3.3 Political Shockwaves: ESG Case Studies from the Trump Era

· 3.4 Investor Reactions: Survey Evidence on Political Risk Perception

· 3.5 Strengthening ESG Resilience in Politicised Markets

· 3.6 Conclusion: ESG in an Age of Ideological Volatility

CHAPTER 4: CRACKS IN THE INVESTOR LENS: COGNITIVE BIASES IN ESG INVESTMENT

· 4.1 Introduction: The Myth of Rational ESG Investing

· 4.2 Mapping the Bias Landscape: Theory and Literature

· 4.3 Global Patterns of ESG Misjudgment

· 4.4 Surveying Bias in Action: Insights from Malaysian Investors

· 4.5 Educating the ESG Mindset: Behavioural Solutions

· 4.6 Conclusion: Toward a More Rational ESG Investor

CHAPTER 5: THE ILLUSION OF GREEN: GREENWASHING, CREDIBILITY RISKS, AND MARKET FAILURES

· 5.1 Introduction: Green on the Surface: ESG’s Credibility Crisis

· 5.2 Rating Sustainability: Theory and Critiques of ESG Metrics

· 5.3 Behind the Green Curtain: Case Examples of Reputational Engineering

· 5.4 Insights from the Field: Interviews with Malaysian ESG Professionals

· 5.5 Restoring Trust: Institutional and Behavioural Solutions

· 5.6 Conclusion: Reclaiming Substance in Sustainable Finance

CHAPTER 6: CONFIDENCE GAMES AND HERD INSTINCTS: BEHAVIORAL DISTORTIONS IN SUSTAINABLE MARKETS

· 6.1 Introduction: ESG Safety Illusion

· 6.2 Theoretical Fault Lines: Overconfidence and Collective Irrationality

· 6.3 ESG Boom-Bust Cycles: Global Case Reflections

· 6.4 Interview Insights: Herding and Overconfidence in Malaysian ESG Behavior

· 6.5 Managing Momentum: Behavioural Risk Controls for ESG Portfolios

· 6.6 Conclusion: Rethinking ESG as a Social Signal

CHAPTER 7: MALAYSIA’S DUAL ESG FRAMEWORK: INTEGRATING ISLAMIC FINANCE AND SUSTAINABLE INVESTING

· 7.1 Introduction: Sustainability Meets Syariah

· 7.2 Literature and Theoretical Grounding: Harmonising Ethical Systems

· 7.3 Real-World Convergence: Institutional and Policy Innovations in Malaysia

· 7.4 Evidence from the Ground: Questionnaire Insights from Malaysian ESG Stakeholders

· 7.5 Advancing Dual Integrity: Policy and Behavioral Recommendations

· 7.6 Conclusion: A Malaysian Model of ESG Convergence

CHAPTER 8: ASIA’S ESG MOMENTUM: GROWTH NARRATIVES AND STRUCTURAL VULNERABILITIES

· 8.1 Introduction: The Rise of ESG in Asia

· 8.2 Literature and Theory: Asia’s ESG Push Through a Structural Lens

· 8.3 Reality Check: Regional Case Studies of ESG Contradictions

· 8.5 Rethinking ESG Credibility: Regional Solutions and Behavioural Correctives

CHAPTER 9: EUROPE’S ESG LEADERSHIP: REGULATORY INNOVATION AND HIDDEN INEFFICIENCIES

· 9.1 Introduction: Reframing Europe’s ESG Reputation

· 9.2 Theory Meets Bureaucracy: ESG Regulation in the EU

· 9.3 Lost in Translation: Case Examples of ESG Mislabeling and Reclassification

· 9.4 Field Reflections: Questionnaire Insights from EU ESG Professionals

· 9.5 Reforming the Framework: Making ESG Regulation Work

· 9.6 Conclusion: Rethinking ESG Leadership

CHAPTER 10: THE UNITED STATES AND ESG: POLITICAL REVERSALS, INVESTOR RESISTANCE, AND MARKET ADAPTATIONS

· 10.1 Introduction: ESG’s Politicisation in America

· 10.2 Reversals and Repercussions: Unpacking Federal and State-Level ESG Conflicts

· 10.3 Realignment in Practice: Case Evidence from Institutional Investors

· 10.4 Interviews from the Frontlines: How U.S. ESG Leaders Are Adapting

· 10.5 Surveying the Divide: Evidence from ESG Practitioners Nationwide

· 10.6 Conclusion: Lessons from Fragmented Markets

CHAPTER 11: ESG TECHNOLOGY, INVESTOR JUDGMENT, AND LOCAL ADAPTATION

· 11.1 Introduction: Digital Disruption in ESG Investing

· 11.2 Algorithmic Oversight: Theoretical Anchors and Behavioural Tensions

· 11.3 Embedded or Erased? Case Reflections from Malaysian Fund Managers

· 11.4 Quantifying Local Frictions: Survey Insights from ESG Practitioners

· 11.5 Conclusion: Tech and Local Insight

CHAPTER 12: PLANNING ESG FUTURES: GLOBAL SCENARIOS AND REGIONAL VALUES

· 12.1 Introduction: ESG Beyond a Universal Blueprint

· 12.2 Worldviews That Matter: Theoretical Foundations and Cultural Anchors

· 12.3 Futures as Perceived: Survey Results from Asian ESG Professionals

· 12.4 Voices of Vision: Interview Insights from ESG Policymakers and Thought Leaders

· 12.5 Competing Horizons: Scenario Mapping and Strategic Differentiation

· 12.6 Conclusion: Toward Inclusive ESG Futures

Über Autor(innen)

Kok Loang Ooi, LLM, CMIIA, CIA is with the Faculty of Business and Economics, Universiti Malaya, specializing in behavioural finance, ESG investing, and AI in financial markets. He has published over 60 articles in Web of Science and Scopus-indexed journals, including works on herding behaviour, investor sentiment, and overreaction in financial markets. He also serves as Chief Economist at Censuria Capital and Chairman of the Strategic Finance Research Centre.

Norazlin Binti Ab Aziz is Senior Lecturer in Finance at Universiti Malaya. Her research spans Islamic finance, sustainable economics, and the Malaysian carbon market. She has published in leading outlets such as the Journal of Islamic Accounting and Business Research, where she is Associate Editor. Her work explores the intersection of financial decision-making, language, and sustainability, reflecting both her academic and professional experience in the unit trust industry.

Wee Yeap Lau is Professor of Economics at Universiti Malaya and Academic Board Member of the Asia-Europe Institute. His research covers insurance economics, financial engineering, and policy design. He has published over 70 articles in Web of Science journals and authored two books with Palgrave Macmillan. A recipient of the MEXT scholarship and AUA Fellowship, he has held visiting positions at Osaka University, the National University of Singapore, and UAE University.