ESG in investor profiling: what are we talking about?

Purpose: Inspired by the groundbreaking novel European regulations on financial investors’ profiling (MiFID II regulation and the ESMA 2022 Guidelines), this paper aims to establish which distinctive socio-demographic traits distinguish investors who declare a generalized interest in all three environmental (E), social (S), and governance (G) pillars and investors who express interest in just one individual pillar or a combination of two pillars. Design/methodology/approach: Based on a unique dataset of 190 real-world retail investors, this paper aims to create a profile of three types of investor: those whose interest lies in just the environmental pillar, those interested in a combination of the environmental and social pillars, and those interested in all three E, S, and G pillars jointly. Moreover, we try to ascertain whether it is possible to observe statistically significant differences between the different types of investors. Findings: The results obtained indicate that it is possible to profile investors who are environmentally-oriented and investors who are ESG-oriented. Notably, levels of financial literacy do not influence investor ESG attitudes. Practical implications: The results obtained may have multifaceted implications for financial advisors, the banking and financial institution industry, and marketing strategists, as well as for further research. Originality/value: The originality of this paper derives from the responses used in the analysis, which were collected from a sample of real-world retail investors who completed a mandatory MiFID-questionnaire, validated by the Italian Securities and Markets Supervisory Authority. Our paper thus represents a bridge between a theoretical approach and real-world practice.