Behavioural Finance and Ethical Investing

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: ESGâs 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: MALAYSIAâS 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: ASIAâS ESG MOMENTUM: GROWTH NARRATIVES AND STRUCTURAL VULNERABILITIES

· 8.1 Introduction: The Rise of ESG in Asia

· 8.2 Literature and Theory: Asiaâs 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: EUROPEâS ESG LEADERSHIP: REGULATORY INNOVATION AND HIDDEN INEFFICIENCIES

· 9.1 Introduction: Reframing Europeâs 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: ESGâs 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