Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025)

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Behavioural Finance and ESG: Current Landscape Summary

Authors
Yujia Shu1, *
1The University of Edinburgh, 29 Buccleuch Pl, Edinburgh, UK
*Corresponding author. Email: futurestudents@ed.ac.uk
Corresponding Author
Yujia Shu
Available Online 17 September 2025.
DOI
10.2991/978-94-6463-835-6_50How to use a DOI?
Keywords
Literature Review; Behavioral Bias; ESG; Investors
Abstract

In recent decades, against the backdrop of significant growth in the investment market, investors have increasingly sought ways to generate favourable returns. While traditional theories such as portfolio theory provide an analytical basis for investment decisions, these approaches often neglect the psychological factors that shape investor behaviour. This literature review explores the importance of behavioural finance: it focuses on how psychological biases can influence investor decisions. By analysing research published between 2000 and 2024, this paper focuses on four key biases – overconfidence, loss aversion, herd behaviour and confirmation bias – and assesses how they influence investor attitudes and investment intentions, particularly in relation to environmental, social and governance (ESG) factors. The review draws on a variety of academic articles and empirical studies to determine how these biases manifest themselves in both institutional and retail investment contexts, ultimately shaping outcomes that may either promote or hinder sustainable investment strategies. These findings contribute to a nuanced understanding of investor psychology. In addition, the article provides actionable insights for investors and a roadmap for future research on bias-mitigation tools such as AI-driven analytics.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
17 September 2025
ISBN
978-94-6463-835-6
ISSN
2352-5428
DOI
10.2991/978-94-6463-835-6_50How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Yujia Shu
PY  - 2025
DA  - 2025/09/17
TI  - Behavioural Finance and ESG: Current Landscape Summary
BT  - Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025)
PB  - Atlantis Press
SP  - 473
EP  - 481
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-835-6_50
DO  - 10.2991/978-94-6463-835-6_50
ID  - Shu2025
ER  -