Risk Tolerance and ESG Priorities: A Comparative Analysis of Retail and High-Net-Worth Investors’ Behavior in Sustainable Investing

This research aims to address the significant differences in sustainable investing practices and preferences between retail investors and high-net-worth (HNW) investors, as well as their impact on stakeholders. Using a quantitative methodology—including confirmatory factor analysis, reliability testing, descriptive statistics, and inferential analysis—the study highlights notable contrasts between the two groups. Findings reveal that HNW investors tend to accept higher levels of risk, favor longer investment horizons, and place stronger emphasis on environmental, social, and governance (ESG) factors in their decision-making. Additionally, demographic attributes play a key role in shaping ESG priorities. The results stress the need for tailored sustainable investment products and offer broad recommendations for financial advisors, investment institutions, and policymakers. Future research should focus on qualitative explorations of investor motivations and longitudinal studies to track the evolution of sustainable investment practices across different investor segments. The study reinforces the critical role of investment in driving economic growth. By synthesizing the sustainable investment behaviors of retail and HNW investors alongside policy frameworks, it emphasizes how investor behavior can serve as a strategic tool for advancing national sustainability and broader economic development. In particular, it illustrates how varying ESG preferences, risk appetites, and investment horizons can inform the design of targeted incentives and regulatory measures.