Does Sustainability Performance Affect the Financial Performance of Indian Companies?
Abstract
In this paper we examine the relationship between firm performance and sustainability performance of Indian companies. We look at accounting based measures of Return on assets (ROA), Return on Equity (ROE), Return on Capital Employed (ROCE) and market based measure of Tobin’s Q (Price to book Ratio) as firm performance measures and ESG (Environment, Social and Governance) scores for measure of sustainability performance. We control for other variables like size, leverage and risk and study the linear and non linear relationship between firm performance and sustainability performance of Indian companies. In this context, we present some new evidence for the India capital markets.