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The Influence of Environmental, Social, and Governance (ESG) Perception on Investor Trust and Brand Relationship Quality: A Study Among Retail Investors in Hong Kong

Author

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  • Hok Ko Pong

    (Faculty of Management and Hospitality, Technology and Higher Education Institute of Hong Kong, Hong Kong, China)

  • Fion Lai Chun Man

    (Faculty of Business, University of Wollongong College, Hong Kong, China)

Abstract

Background/Introduction: Investor trust and brand relationship quality, along with initiatives for environmental, social, and governance (ESG), have become highly important. Despite their relevance, limited research has been conducted on how ESG initiatives influence investors’ perceptions in financial markets. Objectives/Aims: This work conducts a cross-sectional analysis to examine the relationship between perceived ESG initiatives and investor trust and brand relationship quality among retail investors in Hong Kong, one of one of the world’s leading financial markets. Methods: This study involved 479 retail investors. Three instruments were administered in the questionnaires: (1) the perceived environmental, social, and governance scale, (2) the investor trust scale, and (3) the brand relationship quality scale. Results: The analysis demonstrates that PESG and various aspects of investor trust and brand relationship quality had strong positive correlations. Notably, the environmental and social concerns of PESG were found to be strong predictors of investor trust and brand relationship quality, whereas governance awareness had the least effect. Conclusions: Improving a firm’s ESG image can boost investors’ confidence and the quality of brand relationships, thus aligning with sustainability and business strategies.

Suggested Citation

  • Hok Ko Pong & Fion Lai Chun Man, 2024. "The Influence of Environmental, Social, and Governance (ESG) Perception on Investor Trust and Brand Relationship Quality: A Study Among Retail Investors in Hong Kong," JRFM, MDPI, vol. 17(10), pages 1-26, October.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:10:p:455-:d:1494157
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    References listed on IDEAS

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    1. Lee, Michael T. & Raschke, Robyn L. & Krishen, Anjala S., 2022. "Signaling green! firm ESG signals in an interconnected environment that promote brand valuation," Journal of Business Research, Elsevier, vol. 138(C), pages 1-11.
    2. Gunnar Friede & Timo Busch & Alexander Bassen, 2015. "ESG and financial performance: aggregated evidence from more than 2000 empirical studies," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 210-233, October.
    3. Nicole Darnall & Hyunjung Ji & Kazuyuki Iwata & Toshi H. Arimura, 2022. "Do ESG reporting guidelines and verifications enhance firms' information disclosure?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1214-1230, September.
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