Green Investment as a Mechanism to Combat Climate Change: Digital Natives’ Perspective

Abstract

The widespread issues of climate change and ecological degradation have prompted nations to transition towards green and sustainable investment practices. Digital natives, particularly Generation Z, are highly sensitive and committed to sustainability and environmental concerns. This study aims to identify the behavioral determinants influencing the preference for green investment instruments over traditional investment options among Generation Z investors. The research extends the Theory of Planned Behavior (TPB) model by incorporating two additional variables: social media usage as a mediator and corporate social responsibility (CSR) as an independent variable. A quantitative methodology is employed, utilizing structural equation modeling (SEM) to test the proposed hypotheses. The sample comprises 395 individuals selected through purposive sampling. The regression coefficients indicate that CSR has a significant impact (r=0.16; p=0.02), and social media usage effectively mediates the relationship between green investment intentions and investor attitudes. However, the attitude of investors shows an insignificant relationship with investment choices. The findings contribute to the existing literature on green investments by integrating investor intentions and CSR disclosures by companies. These insights can assist fund managers, financial institutions, and policymakers in designing frameworks that promote funding for green projects and initiatives. Since behavioral factors are dynamic, analyzing them with novel determinants can guide future research and facilitate the development of more effective strategies for promoting sustainable investments.