Comparing ESG Investment Strategies: Institutional vs. Retail Investors

Abstract

This study examines how institutional and retail investors approach Environmental, Social, and Governance (ESG) investments in Europe and North America. Data from 300 investors reveal that institutional investors integrate ESG into long-term risk management, portfolio allocation, and sustainability reporting, achieving higher returns and stability. Retail investors are influenced by trends, ratings, and media, resulting in reactive and fragmented investment behaviors. The study identifies knowledge gaps, market perception differences, and strategy effectiveness, providing actionable recommendations for improving ESG literacy, promoting responsible investment, and aligning retail behavior with long-term sustainability goals.