The Psychology of Green Investments: Underpinning Personality Traits and Future Time Orientation

Abstract

This study examines how investors’ personality traits develop a psychology of green investments. The future time orientation (FTO) is examined as a mediator. It combines two streams of knowledge, that is, human psychology and sustainable finance. Construal level theory was used to establish the relationships. In total, 539 investors who invested in green products were selected. Data were collected using a structured and self-administered questionnaire. The structural equation modelling was used to examine the relationships using the partial least squares method. All the Big Five personality traits had a positive and significant relationship with green financial investment behaviour. The results found that investors with diverse personalities tend to take environmentally responsible initiatives. Additionally, FTO mediated these relationships partially. The results of this study are beneficial for the investors and businesses. Aligning green investments with investor personality types could enrich market reach, wherein the FTO stands as another important factor. This research combines two distinct streams of study: behavioural finance and sustainability. Therefore, this study stands novel by examining how psychological factors influence pro-environmental financial decisions.