Investigating Socially Responsible Investor Behavior Within the Scope of Theory of Planned Behavior

Introduction

Certainly, the most important investment criterion for investors is financial performance. However, if individuals gain a non-financial benefit when they invest in socially responsible way, they may care less about the financial performance (Renneboog et al., 2008). Indeed, investors are not only looking for high returns-low risk, but also for broader returns to address their concerns (Statman, 2004). The new understanding of investment, which emerged as a result of these concerns, has been named as ethical, sustainable or socially responsible investment (SRI). If SRI is defined in general terms on which many researchers agree, it is the process of strategic investment decision-making by combining financial and non-financial aspects, such as personal ethics, social demands, environmental considerations, religious beliefs, and governance issues (Cheah et al. 2011; Lewer et al., 2006; Lozano et al., 2006; Scholtens, 2006). Today, the definition of sustainable investment has become relatively standardized and focused on environmental, social and governance (ESG) issues (Bernow et al., 2017). Investors who act in line with all these concerns are called socially responsible investors.

SRI have grown and developed rapidly over the years. Undoubtedly, there are numerous factors that trigger this growth in different cultures. However, three main factors can be mentioned that explain the growth in SRI. These are classified by Schueth (2003) as access to accurate and quality information, women's participation in business life, and the disappearance of the perception that SRI underperform. On the other hand Tripathi & Bhandari (2015) sorted the reasons of investors to prefer SRI under four groups. First reason is the ethical concerns in investor behavior. Secondly, they may choose these investments in line with their financial expectations. Third, they can integrate environmental considerations as an integral part of their investments in line with regulatory constraints. Fourth, investors might be trying to enhance their prestige by sharing their concerns and behaviors about environmental and social issues with the public (Tripathi & Bhandari, 2015).

As the amount of SRI is enormous, it is necessary to identify the factors that explain why individuals invest in this area. Many studies have demonstrated that SRIs do not underperform conventional investments and that there is not much difference in terms of risks. Therefore, choosing SRI should have a reason beyond financial return (Dorfleitner & Utz, 2014). Institutional investors generally tend to these investments considering their reputation in the society. However, an external and non-monetary factor that leads individuals to SRI cannot be revealed so clearly (Hong & Kacperczyk, 2009). Beal et al. (2005) identified three factors that lead to SRI orientation. These are financial returns, intangible gains, and social change.

In the literature, objectively measurable differences have been identified with studies comparing conventional and socially responsible investors. Although different results have been obtained according to the geographical region and time, studies have shown that the socially responsible investors profile consists of young people and especially women (Escrig-Olmedo et al., 2013; Junkus & Berry, 2010; Rosen et al., 1991; Tippet & Leung, 2001). Schueth (2003) evaluates this situation as women establish a natural affinity among themselves with the philosophy of SRI. In addition, high education level is found to be another common feature of the socially responsible investor group (Escrig-Olmedo et al., 2013; Nilsson, 2008; Tippet & Leung, 2001).