Behavioural Finance and Ethical Investing

1. Auflage 2026
ISBN: 978-1-041-16180-6
Verlag: Routledge

Buch, Englisch, 230 Seiten, Format (B × H): 161 mm x 240 mm, Gewicht: 514 g

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.

This 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. This book looks at established and emerging markets in diverse regions such as Asia, Europe, and the United States 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.

This 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

Lau, Wee Yeap

Fachgebiete

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

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 Behavioural 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 Behavioural Lens

· 2.3 Global Tensions: Ethical Branding and Financial Reality

· 2.4 What the Data Shows: ESG Beliefs versus 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 Misjudgement

· 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 JUDGEMENT, 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 an Adjunct Professor at City University Malaysia and a leading scholar in behavioural finance. He holds a PhD in Behavioural Finance and an MA in Finance from Universiti Sains Malaysia and an LLM in Business Law from the International Islamic University Malaysia. Formerly with KPMG, he has extensive experience in audit and advisory services. His research focuses on herding behaviour, investor sentiment, overreaction, ESG investing, cognitive biases, and AI-driven financial markets. A Certified Internal Auditor and a member of The Institute of Internal Auditors Malaysia, Dr. Ooi has published over 60 articles in Web of Science and Scopus-indexed journals and is regularly invited to speak at international academic and policy forums.

Wee Yeap Lau is a Professor at the Faculty of Business and Economics and an Academic Board Member of the Asia-Europe Institute, Universiti Malaya. A former MEXT scholar at Osaka University and AUA Fellow at UAE University, he has also been a Visiting Scholar at the National University of Singapore’s Risk Management Institute. He holds a PhD and an MA in Economics from Osaka University and an MSc in Financial Engineering from NUS, supplemented by executive training at Princeton University. He has published over 70 Web of Science-indexed articles, authored two books with Palgrave Macmillan, and contributed to professional publications for the Malaysian Insurance Institute and University Press. He is a member of CPA Australia and an elected member of the International Statistical Institute, with research interests in insurance economics, financial engineering, and policy design.