• Abstract

    Environmental, Social, and Governance (ESG) influence on stock market investing decisions is becoming more prevalent as a vital aspect of sustainable development. This study aims to investigate the ethical implications surrounding the utilization of technology in the context of Environmental, Social, and Governance - ESG investing and its essential role in fostering unbiased decision-making. In addition, this research also attempted to examine the multifaceted dynamics and challenges that arise when digital tools are leveraged to assess ESG factors in investment strategies. We employ a quantitative research approach and statistical methods, including regression and structural equation modeling to examine the relationships between ESG, Digital Technology adoption, and Sustainable Investment decisions by incorporating the Ethics of AI and the Theory of Planned Behavior (TPB). The result indicated -ESG investing, highlighting the growing importance of ethical considerations in financial decision-making. It then delves into the integration of technology, specifically artificial intelligence, into ESG assessment processes. This technological advancement has the potential to enhance the accuracy and timeliness of ESG evaluations, yet it also introduces complex ethical dilemmas related to data privacy, algorithmic bias, and transparency. This study provides a comprehensive overview of ESG investing, highlighting the growing importance of ethical considerations in financial decision-making. The results of the study have implications for investors, policymakers, regulators, and society in general. The study helps investors make wise decisions and penetrate new markets. The research contributes to the literature on ESG investing. It then delves into the integration of technology, specifically artificial intelligence, into ESG assessment processes.

  • References

    1. Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T
    2. Boffo, R., and R. Patalano (2020), “ESG Investing: Practices, Progress and Challenges”, OECD Paris, www.oecd.org/finance/ESG-Investing-Practices-Progress-and-Challenges.pdf
    3. Bosnjak, M., Ajzen, I., & Schmidt, P. (2020). The theory of planned behavior: Selected recent advances and applications. Europe’s Journal of Psychology, 16(3), 352–356. https://doi.org/10.5964/ejop.v16i3.3107
    4. Božić, V. (2023). ENVIRONMENTAL, SOCIAL, AND GOVERNANCE APPROACH (ESG) & ARTIFICAL INTELLIGENCE (AI). https://doi.org/10.13140/RG.2.2.34753.12641
    5. Brusseau, J. (2021). Why ESG Investing Needs to be Updated for the AI Economy. Journal of Sustainable Finance & Investment, DOI:10(20430795.2021), 1874212.
    6. Huang, C., Zhang, Z., Mao, B., & Yao, X. (2023). An Overview of Artificial Intelligence Ethics. IEEE Transactions on Artificial Intelligence, 4(4), 799–819. https://doi.org/10.1109/TAI.2022.3194503
    7. Jae Young Jang (2021). The Impact of ESG Management on Investment Decision: Int. J. Financial Stud. 2021, 9(3), 48; https://doi.org/10.3390/ijfs9030048
    8. Michelson, G., Wailes, N., Van Der Laan, S., & Frost, G. (2004). Ethical Investment Processes and Outcomes. Journal of Business Ethics, 52(1), 1–10. https://doi.org/10.1023/B:BUSI.0000033103.12560.be
    9. Raut, R. K., Das, N., & Kumar, R. (2018). Extending the Theory of Planned Behaviour: Impact of Past Behavioural Biases on the Investment Decision of Indian Investors. Asian Journal of Business and Accounting, 11(1), 265–291. https://doi.org/10.22452/ajba.vol11no1.9
    10. Rounok, N., Qian, A., & Alam, M. A. (2023). The Effects of ESG issues on investment decision through corporate reputation: Individual investors’ perspective. International Journal of Research in Business and Social Science (2147- 4478), 12(2), 73–88. https://doi.org/10.20525/ijrbs.v12i2.2354
    11. Siau, K., & Wang, W. (2020). Artificial Intelligence (AI) Ethics: Ethics of AI and Ethical AI. Journal of Database Management, 31(2), 74–87. https://doi.org/10.4018/JDM.2020040105
    12. Shrivastava, U., Song, J., Han, B. T., & Dietzman, D. (2021). Do data security measures, privacy regulations, and communication standards impact the interoperability of patient health information? A cross-country investigation. International Journal of Medical Informatics, 148, 104401.
    13. Timmermans, S., & Epstein, S. (2010). A world of standards but not a standard world: Toward a sociology of standards and standardization. Annual review of Sociology, 36, 69-89.
    14. Veale, M., Van Kleek, M., & Binns, R. (2018). Fairness and accountability design needs for algorithmic support in high-stakes public sector decision-making. In Proceedings of the 2018 chi conference on human factors in computing systems. 1-14.
    15. Yusbardini, Y., & Natsir, K. (2022). Investor bias behavior in investment decision making. In Tenth International Conference on Entrepreneurship and Business Management 2021 (ICEBM 2021), 424-428. https://doi.org/10.2991/aebmr.k.220501.064

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Copyright (c) 2024 Malque Publishing

How to cite

Patil, S. R., Jadhav, S. N., & Nimbagal, S. (2024). A study on ethical implications of using technology in ESG investing and ensuring unbiased decision making. Multidisciplinary Science Journal, 6(8), 2024153. https://doi.org/10.31893/multiscience.2024153
  • Article viewed - 496
  • PDF downloaded - 260