This shift in financial decision-making, influenced by behavioural economics and sustainable investment, is a significant and crucial development. Understanding how cognitive biases, social preferences, and psychological factors impact investor behaviour in the context of ESG and impact investments is of utmost importance. This understanding can explain why investments often deviate from sustainability. We can gain insights into these deviations by analyzing present bias, loss aversion, and herd behaviour. The chapter delves into the types of nudges, such as framing effects and default options, that can guide financial decisions towards sustainability. The chapter uses global and local case studies, such as India's emergence in green bonds and ethical funds, to illustrate that behavioural economics not only explains but also drives the trend towards responsible investing. It concludes by offering insights into how policymakers, financial institutions, and corporations can leverage behavioural insights to promote long-term sustainable investments.