INVESTOR PERCEPTION OF GREEN BONDS AS A SUSTAINABLE INVESTMENT OPTION
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INVESTOR PERCEPTION OF GREEN BONDS AS A SUSTAINABLE INVESTMENT OPTION
Authors:
By: Rakshith I R
Dayananda Sagar Business School (DSBS), Bangalore, Karnataka, India
Under the guidance of
Sekappa N Makkalageri
Associate Professor Dayananda Sagar Business School (DSBS)
Abstract: As the global economy increasingly prioritizes sustainable development and environmental resilience, green bonds have emerged as a crucial financial instrument to fund eco-friendly initiatives while offering competitive returns to investors. This study investigates investor perception of green bonds as a viable and sustainable investment option in the Indian context. With the financial sector adapting to environmental, social, and governance (ESG) frameworks, understanding how investors perceive the credibility, risk, and returns of green bonds is vital for scaling sustainable finance. The research explores key determinants such as investor awareness, transparency, governance frameworks, tax incentives, market dynamics, and green product innovation. Using a structured questionnaire, data were collected from 76 respondents through random sampling. The study applied Exploratory Factor Analysis (EFA) using SPSS to identify core factors influencing investor sentiment. Findings reveal that investors generally view green bonds favorably, associating them with both financial profitability and environmental responsibility. Transparency and governance emerged as dominant factors that build trust and encourage participation. However, the study also notes limitations such as low investor awareness and lack of access among retail investors. The research underscores the need for enhanced policy support, standardized regulations, investor education, and broader institutional involvement to unlock the full potential of the green bond market in India. These insights are pivotal for issuers, regulators, and financial institutions aiming to align investment behavior with sustainable development goals.
Keywords:Green Bonds, Investor Perception, Sustainable Investment, ESG Framework, Exploratory Factor Analysis (EFA)