Sustainable Financial Literacy as a Predictor of Climate-Conscious Financial Behavior

Abstract

Background: The livelihood of the sustainable finance that is increasingly being viewed as an important indicator in solving the issues concerning climate lies in the financial literacy among the individuals. A climate-conscious financial behavior must be reflected in the literacy and thus, this is why the development of particular interventions at a local site, like in Madhya Pradesh, must understand how to put it into practice. Purpose: The overall theme of the proposed study consists of the socioeconomic and cultural heterogeneity of Madhya Pradesh that addresses the predictive function of sustainable financial literacy in altering the financial behavior of climate consciousness. Methods: The intended methodology involved application of this mixed-approach methodology that comprised both a qualitative theme analysis and survey analysis (quantitative) of 110 respondents. The quantitative research concerned the regression modelling, descriptive statistics and reliability test of the literacy scale. The qualitative study employing the theme of institutional trust barriers and cultural motives has been done through theme coding in response to open-ended questions. Findings: The findings also indicate that sustainable financial literacy is a major predictor of climate-conscious financial behavior (0.61, p < 0.001, R² = 0.42). Age, education and wealth were determined to moderate the correlation between literacy and behavior (p= -0.041, p= -0.038 and p= -0.049). The literacy measure is good, as indicated by the internal consistency reliability analysis (Cronbach 0.84). The qualitative study proved that although the barriers of literacy into action include the lack of awareness and financial resources, cultural beliefs and institutional trust are present, which can be employed to facilitating adoption.