Growing consciousness towards sustainable practices has created more responsible organizations in India. It has drawn the attention of academicians and researchers to debate on ESG’s (Environmental, Social, and Governance performance) spending and its effect on financial success. This study analyzes sectoral trends, compares ESG scores and profitability of 42 listed companies in BSE and NSE, India. The primary object is to find out the effect of ESG on financial success. Financial success is measured through the ROCE and ROE. Results revealed that significant differences in ESG ratings among groups and a notable association between sector classification and listed status. However, both correlation and regression analyses demonstrate weak and statistically insignificant connections of ESG contributions and financial success. These results indicate that while ESG performance displays sectoral trends, it operates largely independently of immediate financial outcomes. The study offers valued insights into ESG practices across sectors and highlights the limited predictability of ESG scores on financial performance, guiding corporate strategies toward sustainable and sector-specific practices.

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Sectoral Dynamics of ESG Ratings in Corporate Sectors and Its Impact on Financial Success

  • B. G. Shobha,
  • N. Devika Rani,
  • K. U. Jayalakshmi,
  • Santha Ganesh Iyer,
  • Lourden Selvamani,
  • Abhijit Chakraborthy

摘要

Growing consciousness towards sustainable practices has created more responsible organizations in India. It has drawn the attention of academicians and researchers to debate on ESG’s (Environmental, Social, and Governance performance) spending and its effect on financial success. This study analyzes sectoral trends, compares ESG scores and profitability of 42 listed companies in BSE and NSE, India. The primary object is to find out the effect of ESG on financial success. Financial success is measured through the ROCE and ROE. Results revealed that significant differences in ESG ratings among groups and a notable association between sector classification and listed status. However, both correlation and regression analyses demonstrate weak and statistically insignificant connections of ESG contributions and financial success. These results indicate that while ESG performance displays sectoral trends, it operates largely independently of immediate financial outcomes. The study offers valued insights into ESG practices across sectors and highlights the limited predictability of ESG scores on financial performance, guiding corporate strategies toward sustainable and sector-specific practices.