{"title":"Unveiling the financial effect of ESG disclosure on financial performance in India: climate-sensitive corporates’ perspective","authors":"Santi Gopal Maji, Prachi Lohia","doi":"10.1108/ijoes-02-2024-0039","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>The study aims to examine the impact of environmental, social and governance (ESG) disclosure on financial performance by considering the moderating impact of less and high climate-sensitive industry firms.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>The present study is a panel data approach with a sample of the top 100 Bombay Stock Exchange (BSE)-listed non-financial firms covering the years 2019–2022. Appropriate panel data models have been used to investigate the association between ESG disclosure and financial performance, followed by an instrumental variable regression model to address endogeneity. Further, the panel data interaction effect model has been used to examine the moderating impact.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>The results favour the value-enhancing function of ESG disclosure. Of the three ESG components, only the G factor affects firm performance significantly. The interaction effect model suggests that the link between ESG disclosure and financial performance is moderated by industry. However, this effect is greater for less sensitive industries. The results are robust to endogeneity.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>The study’s novelty lies in the use of the integrated “Stakeholder Capitalism Metrics”, which has not been previously used in any study to assess the ESG disclosure of corporates. To further distinguish itself, the moderating impact of high and less climate-sensitive industry firms on the ESG-financial performance link, which remains unexplored in the fast-emerging nation of India, is looked into.</p><!--/ Abstract__block -->","PeriodicalId":42832,"journal":{"name":"International Journal of Ethics and Systems","volume":null,"pages":null},"PeriodicalIF":1.7000,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Ethics and Systems","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/ijoes-02-2024-0039","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Purpose
The study aims to examine the impact of environmental, social and governance (ESG) disclosure on financial performance by considering the moderating impact of less and high climate-sensitive industry firms.
Design/methodology/approach
The present study is a panel data approach with a sample of the top 100 Bombay Stock Exchange (BSE)-listed non-financial firms covering the years 2019–2022. Appropriate panel data models have been used to investigate the association between ESG disclosure and financial performance, followed by an instrumental variable regression model to address endogeneity. Further, the panel data interaction effect model has been used to examine the moderating impact.
Findings
The results favour the value-enhancing function of ESG disclosure. Of the three ESG components, only the G factor affects firm performance significantly. The interaction effect model suggests that the link between ESG disclosure and financial performance is moderated by industry. However, this effect is greater for less sensitive industries. The results are robust to endogeneity.
Originality/value
The study’s novelty lies in the use of the integrated “Stakeholder Capitalism Metrics”, which has not been previously used in any study to assess the ESG disclosure of corporates. To further distinguish itself, the moderating impact of high and less climate-sensitive industry firms on the ESG-financial performance link, which remains unexplored in the fast-emerging nation of India, is looked into.
期刊介绍:
The International Journal of Ethics and Systems (formerly named Humanomics, the International Journal of Systems and Ethics) is a multidisciplinary journal publishing peer review research on issues of ethics and morality affecting socio-scientific systems in epistemological perspectives. The journal covers diverse areas of a socio-scientific nature. The focus is on disseminating the theory and practice of morality and ethics as a system-oriented study defined by inter-causality between critical variables of given problems.