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Unveiling The Nexus: Environmental, Social, And Governance Performance and Its Impact On the Cost of Debt for Indian Firms
Subject area: Management and Commerce · Area of research: ESG and Corporate Finance
Abstract
Environmental, Social, and Governance (ESG) considerations have gained prominence in shaping the strategic decisions of firms and the perception of stakeholders. This paper investigates the relationship between ESG performance and the cost of debt for Indian firms. Using panel data analysis from firms listed on the NSE between 2015 and 2023, the study finds that firms with strong ESG performance benefit from lower debt financing costs. This relationship is particularly significant in sectors with high environmental and regulatory exposure. The results emphasize the growing role of non-financial disclosures in credit risk assessment by lenders in India.
References
[1] J. A. Krueger, “Corporate Social Responsibility and Financial Performance,” Journal of Sustainable
[2] Finance, vol. 3, no. 1, pp. 50–70, 2020.
[3] R. Sharma, “Green Bonds and ESG: Indian Case Study,” Economic Times Research, vol. 8, pp. 42–56, 2021.
[4] Sen & M. Verma, “Debt Financing in Emerging Markets,” Financial Economics Review, 2019.
[5] SEBI Guidelines on Business Responsibility and ESG Disclosures, 2023.
[6] Bloomberg ESG Disclosure Guide, 2022.
How to cite this paper
@article{1709187,
author = {Vishal Berwal, Shreya Kushwaha},
title = {Unveiling The Nexus: Environmental, Social, And Governance Performance and Its Impact On the Cost of Debt for Indian Firms},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {8},
number = {12},
pages = {467-468},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1709187.pdf},
abstract = {Environmental, Social, and Governance (ESG) considerations have gained prominence in shaping the strategic decisions of firms and the perception of stakeholders. This paper investigates the relationship between ESG performance and the cost of debt for Indian firms. Using panel data analysis from firms listed on the NSE between 2015 and 2023, the study finds that firms with strong ESG performance benefit from lower debt financing costs. This relationship is particularly significant in sectors with high environmental and regulatory exposure. The results emphasize the growing role of non-financial disclosures in credit risk assessment by lenders in India.},
month = {June},
}