The Role of ESG Performance in Shaping Investment Attractiveness : How Investors Interpret ESG in Investment Decision-Making

Sammanfattning

ESG performance is an important theme in International Management research. The purpose of the study was to examine how investors perceive the relationship between ESG performance and investment attractiveness. The study was based on signaling theory, stakeholder theory, and Carroll´s CSR pyramid, and a qualitative methodology consisting of semi-structured interviews and thematic analysis was followed. The findings show that ESG performance does not have a direct, uniform impact on investment attractiveness but instead is mediated through investor interpretation of how these factors influence financial value and risk. Furthermore, ESG is increasingly viewed as a “hygiene factor” or baseline requirement rather than a differentiator, with governance (G) consistently emerging as the most critical evaluation factor for signaling trust and long-term resilience. Organisations can use these findings to strengthen their investment attractiveness by prioritizing strong governance structures, integrating sustainability into core business strategies, and providing transparent ESG disclosures that move beyond surface-level scores to demonstrate long-term financial stability.