"Bridging the Policy- Participation Gap in Green Finance: Examining the Influence of Financial Literacy, Trust, and Behavioural Biases on Sustainable Investment Decisions"

Green finance is becoming a strategic tool for sustainable development, climate protection and eco-friendly investments. To date, governments and financial regulators around the world have enacted numerous policies for green finance, such as green bonds, environmental, social, and governance disclosure frameworks, sustainable investment policies, and climate-related financial policies. Despite these efforts, the level of investor involvement in green financial products is not uniform, and especially limited in developing countries like India. Past research suggests that policy measures alone will not necessarily result in sustainable investment behaviour, as other factors such as financial literacy, trust, transparency, perceived risk, and behavioural biases also play a role in investor decision making. The study suggests a conceptual model that connects environmental awareness of green finance policy to financial literacy, institutional trust, transparency, and behavioral attributes to sustainable investment decision-making. A thorough literature review reveals some research gaps in understanding investor behavior in relation to policy-based sustainability programs. The results should offer guidance to policymakers, financial institutions and regulators to develop effective green finance policies to boost investor trust and participation.Finally, the study adds to the current debate on sustainable finance, filling the gap between the formulation of policies and the uptake of green financial products by investors.