Articles Vol. 1 No. 01 (2024): Asian Journal of Qualitative Research Published 2024-12-15

Integrating Social and Governance Factors into Financial Decision-Making and Investment

Authors

  • Warda Naeem FAST National University of Computer and Emerging Sciences, CFD, Pakistan Pakistan Author
  • Muhammad Rafique FAST National University of Computer and Emerging Sciences, CFD, Pakistan Pakistan Author
  • Ghulam Haider FAST National University of Computer and Emerging Sciences, CFD, Pakistan Pakistan Author
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Abstract

Primarily, investors used to prefer investing in sectors and companies which seems to gain superior monetary outcome. The theory of Stakeholder integration in business practices emerged as a tactical initiative, emphasizing implication of social and governance factors in business practices to maintain long-term financial health. A significant change in investment strategies has occurred due to integration of social and governance factors in financial decision making. Financial performance of the company is directly impacted by social factors like corporate social responsibility (CSR) and fair labor practices. Organizations committed to social and economic wellbeing of their communities tend to experience more customer loyalty and perceived as more responsible businesses. This perception can lead to a competitive advantage, as customers and inves tors are attracted toward companies and support the companies that prioritize community welfare. The implication of social and governance (SG) factors in financial decision making of textile industry was investigated. For investigation the research methodology adopted include the research paradigm, instrument design, data collection methods, and sampling techniques, aligning with academic standards and latest studies in similar fields. The analysis of the study focuses on the interrelationships between social and governance factors, investor trust, social commitment, and financial decisions. It highlights how strong governance practices and social responsibility impact investor confidence, which subsequently influences financial decision-making. The path coefficients in the model show significant positive relationships, indicating that companies' commitment to social and governance aspects plays a crucial role in shaping investment strategies. By emphasizing social commitment and adopting robust governance practices, companies can improve their financial performance, strengthen investor trust, and achieve long-term sustainability.

Keywords

  • Social Commitment
  • Social Factors
  • Governance Factors
  • Investors Trust and Confidence
  • Employee Welfare
  • Fair Labour Practices
  • Corporate Social Responsibility (CSR)

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