ESG Disclosure and Investment Decision-Making: A Mediated-Moderation Analysis of Risk Perception and Market Uncertainty

ESG Disclosure, Investment Decision-Making, Risk Perception, Market Uncertainty, Sustainable Finance, Green washing

The growing importance of environmental, social, and governance (ESG) considerations has significantly influenced investment decision-making. This study empirically examines the impact of ESG disclosure on investment decisions among institutional and retail investors, focusing on the mediating role of risk perception and the moderating role of market uncertainty. Grounded in Signalling Theory and Stakeholder Theory, the research adopts a quantitative design, using structured questionnaires for primary data collection. Structural equation modelling (SEM) is employed to analyze direct, indirect, and interaction effects. The findings indicate that ESG disclosure positively influences investment decisions, both directly and indirectly through reduced risk perception. Additionally, market uncertainty strengthens this relationship, highlighting the increased reliance on ESG information during volatile conditions. Despite these advantages, challenges such as green washing and lack of standardized reporting persist. The study emphasizes the need for improved ESG disclosure frameworks to enhance transparency, reliability, and sustainable investment outcomes.