Determinants of Environmental, Social and Corporate Governance (ESG) Disclosure: A Study of Pharmaceutical Companies in India

Over time, ESG disclosures became the set of standards for determining companies' sustainability levels and impacts in particular industries including the pharmaceuticals industry.This research pursues a twofold objective, which is to identify the factors that are associated with ESG disclosures at the company level, as well as the Indian pharma industry's regulatory requirements and stakeholder pressures.The research employed an experimental research approach which included the use of primary and secondary data.Multivariate random sampling was used to capture the pharmaceutical firms that are registered at the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).Data on ESG factors was obtained through Business Responsibility and Sustainability Reports (BRSR), Annual Reports and from Bloomberg and Thomson Reuters Eikon databases.Regarding hypotheses testing and identification of factors influencing the choice of ESG disclosure strategies, descriptive analysis, Z-test and multiple regression analysis were used.Implications of the research include that the ''firm size, profitability, governance traits (board of directors' independence), and compliance with regulations of ESG disclosures stand as the FBRs with statistically significant determinants for ESG disclosures.This paper finds that companies with high market capitalization and improved governance scores have better ESG disclosure quality.Such redeployment of cross-tabulation provides quantitative evidence of the business case for sustainability in form of ESG disclosures that enhances financial performance.ESG reporting receives further push from outside sources by adopting stakeholders' pressure and new regulations.This paper illustrates how ESG disclosures serve as a fundamental tool for business model development and sustainable development objectives.The study contributes independently and in relation to previous perceptions about corporate responsibility and sustainable development as employed by the Indian pharmaceutical industry.