ACCI Conference 2024

The COVID-19 pandemic has prompted consumers to place a greater emphasis on values associated with environmental, social, and corporate governance issues, commonly known as ESG. Given the increasing importance of ESG in the post-pandemic financial market, this research examined the relationship between the importance of ESG to retail investors and their investment behaviors during the pandemic, using the 2021 National Financial Capability Study (NFCS) dataset. We identified who was more likely to start investing in non-retirement investment accounts, who was more likely to open a new non-retirement investment account, and who was more likely to trade more frequently than before the pandemic, by focusing on the effects of individuals' investment knowledge and risk tolerance, in addition to the importance of ESG. 22% started investing in non-retirement accounts, 54% opened new accounts, and 47% traded more frequently than before. The importance of ESG, investment knowledge, and risk tolerance were significantly related to the increase in investment behaviors during the pandemic. This study would enhance our understanding of individual investors' engagement with ESG investing in the post-pandemic era. This will contribute to consumer welfare by enabling financial practitioners to provide more effective financial advice based on a better understanding of client psychology.

Author(s): Juhui Ko, Kyoung Tae Kim