Dissecting ESG Performance and Financial Outcomes: Sectoral Insights and Component-Level Analysis of NIFTY 50 Companies

DOI: https://doie.org/10.10399/APER.2025116566

Authors:

Mrs. Sadgi Agarwal, Dr. Abhishek Jha

Keywords:

ESG risk score, Environmental risk score, social risk score, Governance risk score, Firm performance

Abstract:

This study explores the relationship between ESG performance and financial outcomes among selected NIFTY 50 companies for the fiscal year 2023–24. It adopts a dual perspective: offering a sector-wise comparison of ESG scores and Return on Equity (ROE), and examining the individual influence of Environmental (E), Social (S), and Governance (G) dimensions on financial performance. Firm-specific characteristics—such as company size, age, and leverage—are considered to enhance analytical robustness.

The findings indicate significant variation across sectors, with the Financials and FMCG industries demonstrating strong performance in ESG and ROE, respectively. Among the three ESG components, governance emerges as the most impactful in predicting financial outcomes. By disaggregating ESG scores and incorporating firm-level variables, this study addresses existing gaps in regional focus and methodological depth.

The results offer actionable insights for investors, corporate leaders, and policymakers seeking to understand how ESG practices influence profitability within India’s top-listed companies.

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