The purpose of this study is to investigate how ESG and its components impact financial performance of Indian firms. Content analysis was used to calculate ESG disclosure of selected companies’ annual and sustainability reports. The GRI framework, the CRISIL methodology, and relevant academic literature were used to construct ESG disclosure index. Our sample comprises 273 companies covering a period from 2019-2024.
The study employs the Ordinary Least Squares (OLS) regression technique to analyse the association between ESG disclosure and CFP, including a combination control variable. CFP indicators are categorized into two groups: accounting-based variables (ROA and ROE) and market-based variables (Tobin's Q). The results show a strong and positive relationship between ESG disclosure levels and CFP. While Each dimension of ESG has a different effect on different measures of corporate financial performance (CFP). These findings may help companies and regulators identify features that make them more transparent about their ESG practices, especially because voluntary CSR and governance reporting is frequently low in India.
International Journal of Research in Finance and Management
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