Sustainability 2025, 17(24), 10903; https://doi.org/10.3390/su172410903 (registering DOI) - 5 Dec 2025
Abstract
This study investigates the relationship between investor sentiment (IS) and trust in sustainability reports (TSRs) in Egypt, which is an emerging market that has recently strengthened its sustainability disclosure practices. Drawing on behavioral finance and disclosure theory, this study also examines the moderating
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This study investigates the relationship between investor sentiment (IS) and trust in sustainability reports (TSRs) in Egypt, which is an emerging market that has recently strengthened its sustainability disclosure practices. Drawing on behavioral finance and disclosure theory, this study also examines the moderating role of financial literacy (FL) in shaping this relationship. A quantitative, questionnaire-based survey was presented to 328 individual investors who are familiar with sustainability and ESG reporting. The data were analyzed using descriptive statistics, reliability tests, and both simple and hierarchical regression analysis. The results indicate that IS has a strong and significant positive effect on trust in sustainability reports, with market optimism and emotional influence emerging as the most influential dimensions. Furthermore, the hierarchical regression results reveal that FL significantly strengthens the relationship between IS and TSR, indicating that, within the present sample, more financially literate investors translate sentiment into more informed and rational trust judgments. These findings contribute to the accounting and sustainability reporting in the literature by demonstrating that trust in non-financial disclosures is not only shaped by reporting practices but is also heavily influenced by investor psychology and financial competence. This study highlights the importance of enhancing both disclosure quality and investor financial literacy to strengthen confidence in sustainability reporting in emerging markets.
Full article
(This article belongs to the Section Economic and Business Aspects of Sustainability)
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