The Proof Is in the Pudding: How Does Environmental, Social, and Governance Assurance Shape Non-Professional Investors’ Investment Preferences? Evidence from China

Abstract

In this research, we conducted 1 × 3 and 2 × 2 between-subject experiments to delve into the impacts of ESG assurance, the assurance presentation mode, and the depth of assured ESG indicators on the investment inclination of non-professional investors. Our empirical findings illuminated that non-professional investors exhibited a stronger inclination to invest in companies endorsed with ESG assurance compared to those lacking such endorsement. Furthermore, we observed that this inclination was heightened by presenting the ESG assurance report separately from the ESG report and by enriching the assured ESG indicators. Mediation analysis underscored that the influence of ESG assurance on the investment willingness of non-professional investors operated through its effect on their perception of companies’ ESG performances. This study stands as a valuable addition to the literature on non-financial information disclosure, shedding light on the pivotal role of ESG assurance.