A sectoral wise analysis of ESG compliances and financial results: Evidences from Indian Market

Abstract The landscape of the Indian financial market has been revamped over the years. Sustainable investment is an emerging trend in modern times catching the eye of the investors as it relates to the enduring value generation by harmonizing the capital with responsible business practices. Sustainable investment refers to the practice of incorporating Environment, Social and Governance (ESG) components into financial decision making, with the intention to generate long term returns. In this approach to financial analysis, non-financial factors like carbon footprint, labour practices and corporate governance are taken into consideration as factors of long-term sustainability. The purpose of this research is to analyse the impact of sustainable investment on financial performance through a sector specific performance. Different sectors of the economy have distinct exposure to ESG practices, like manufacturing industries are exposed to environmental issues while technological and financial companies are exposed to governance and social concerns. Hence the study seems to be relevant as it explores the connection between sustainable investment and financial performance of companies from different sectors. This paper makes use of correlation and regression models to assess the impact between these selected dependent and independent variables. This study is unique as it compares the industry-wise impact, over the years and thereby bridging the gap in literature. The study aims to provide a meticulous understanding about the nexus between sustainable practices and financial success which in turn aids the companies and policy makers in aligning the industry specific sustainable goals with financial strategies.