Is ESG the Key to Stimulate Financial Performance? An Empirical Investigation

Title

Is ESG the Key to Stimulate Financial Performance? An Empirical Investigation

Creator

Cherian S.; Seranmadevi R.

Description

Environmental, Social, and Governance (ESG) principle is a critical framework for businesses and non-business entities. Recently, investors increasingly concentrate on the ethical impact of their investments in addition to financial rewards. The present study outlines links between a companys ESG practices and its financial performance. By means of performance comparison between the Nifty 100 ESG and Nifty 100 Indices within the Indian context, it issuggested that investing in ESG-adopting companies can lead to better financial performance. The study uses statistical analysis to compare the performance of both indices between 2018 and 2022. The analysis includes financial ratios, such as P/E ratio, ROA, ROE, and ROCE. The findings reveal a relatively modest connection between ESG and P/E ratio. The stronger negative correlations between ESG and key financial metrics (ROA, ROE, and ROCE), signifies a more robust trade-off between ESG focus and financial performance. The Author(s), under exclusive license to Springer Nature Switzerland AG 2024.

Source

Studies in Systems, Decision and Control, Vol-223, pp. 297-306.

Date

2024-01-01

Publisher

Springer Science and Business Media Deutschland GmbH

Subject

ESG; Financial performance; Nifty 100 ESG index; Nifty 100 index; P/E ratio; ROA; ROCE; ROE

Coverage

Cherian S., Christ (Deemed to Be University), Bangalore, India; Seranmadevi R., Christ (Deemed to Be University), Bangalore, India

Rights

Restricted Access

Relation

ISSN: 21984182

Format

Online

Language

English

Type

Book chapter

Identifier

https://doi.org/10.1007/978-3-031-51997-0_25

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