Profiling Investors Under Climate and Environmental Stress: A Novel Fuzzy Decision-Making Model Bridging Ecology and Social Psychology

Abstract

This study examines the impact of climate change and environmental risks on investment decisions, focusing on human behavior. The fundamental problem is that decision-makers' perceptions of environmental stressors and social factors distort resource allocation through uncertainty and behavioral biases. Therefore, the key points to analyze are which criteria most strongly determine the investor profile and which institutional/investor profiles are more resilient under crisis conditions. A fundamental shortcoming in the literature is that studies focusing on a single variable, often limited to data specific to developed markets, fail to produce a consensus on the most critical stressors. To address this gap, a new multi-criteria decision-making model encompassing economic, financial, ecological, and social psychology dimensions is proposed. Expert weights are calibrated using machine learning based on demographic characteristics. Criteria weights and their interactions are calculated using the criteria importance assessment (CIMAS) method; five investor risk profiles are ranked using additive ratio assessment (ARAS); and all assessments are conducted using Koch Snowflake fuzzy sets, which provide a more detailed and flexible representation of uncertainty. The study contributes to the literature by determining which criteria are prioritized and which risk profile is most appropriate using a new and applicable fuzzy decision model. The proposed model (i) preserves the nuance of judgments by reducing information loss compared to traditional triangular/trapezoidal fuzzy numbers and (ii) increases representational fairness by not assuming equal expert weights. The key findings indicate that social acceptance and stakeholder perception are the most important criteria, closely followed by regulatory risk. The most appropriate investor profile during crisis periods is one that complies with social norms and stakeholder pressure.