Home / Current Issue / Paper 1713880
A Study on the Impact of ESG Disclosures on Financial Performance and Investing Behaviour in The Indian Energy Sector
Subject area: Management and Commerce · Area of research: Finance
DOI: https://doi.org/10.64388/IREV9I7-1713880
Abstract
This study examines the relationship between Environmental, Social, and Governance (ESG) disclosures, financial performance, and investor behaviour in the Indian energy sector. An ESG Disclosure Index was constructed using manually coded data from company sustainability and annual reports. Financial and investment indicators were obtained from secondary sources. Correlation and regression analyses were conducted to assess the influence of ESG disclosure on profitability, market valuation, and institutional investment flows. The results indicate weak and statistically insignificant relationships across all tested variables, suggesting that ESG transparency does not currently serve as a determinant of financial outcomes or investor confidence within the sector. These findings highlight the limited market responsiveness to ESG information and underscore the need for improved disclosure quality and standardisation. The study contributes sector-specific evidence from an emerging market and identifies directions for future research on ESG reporting practices
Keywords
Corporate Governance, ESG Disclosure, Financial Performance, Institutional Investment, Sustainability Reporting
References
[1] Chen, S., Song, Y., & Gao, P. (2023). Environmental, social, and governance (ESG) performance and financial outcomes: Analysing the impact of ESG on financial performance. Journal of Environmental Management, 345.
[2] Elianto, A. D., Afif, E., Anwari, D., & Januardi, N. V. (2023). The impact of environmental, social, and governance (ESG) on return on assets (ROA): Cross-country evidence of the energy sector in 2019–2021. Diponegoro Journal of Management, 12.
[3] Makridou, G., Doumpos, M., & Chrysochou, P. (2023). Relationship between ESG and corporate financial performance in the energy sector: Empirical evidence from European companies. International Journal of Energy Sector Management, 18(4).
[4] Naeem, N., & Cankaya, S. (2022). The impact of ESG performance on financial performance: A study on global energy and power generation companies. Journal of Sustainable Finance & Investment, 8(1).
[5] Papoutsi, A., & Sodhi, M. S. (2020). A sustainability disclosure index using corporate sustainability reports. Journal of Sustainability Research, 2(2).
[6] Pinheiro, A. B., Pereira, G. B., Nazário, R. T., Berchmans, N. A., Machado, A. M., Toledo, T. A., & Segatto, A. P. (2023).
[7] Exploring the relationship among ESG, innovation, and economic and financial performance: Evidence from the energy sector. International Journal of Energy Sector Management, 18(3).
[8] Determinants of environmental, social and corporate governance (ESG) disclosure: A study of Indian companies. International Journal of Disclosure and Governance, 17(4), 208–217.
[9] Sinclair, G., Spaenjers, C., & Tang, T. (2018). Understanding ESG ratings and ESG indexes. In Research Handbook of Finance and Sustainability.
How to cite this paper
@article{1713880,
author = {Devi Srilalitha Shahukaru},
title = {A Study on the Impact of ESG Disclosures on Financial Performance and Investing Behaviour in The Indian Energy Sector},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {7},
pages = {2256-2258},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1713880.pdf},
abstract = {This study examines the relationship between Environmental, Social, and Governance (ESG) disclosures, financial performance, and investor behaviour in the Indian energy sector. An ESG Disclosure Index was constructed using manually coded data from company sustainability and annual reports. Financial and investment indicators were obtained from secondary sources. Correlation and regression analyses were conducted to assess the influence of ESG disclosure on profitability, market valuation, and institutional investment flows. The results indicate weak and statistically insignificant relationships across all tested variables, suggesting that ESG transparency does not currently serve as a determinant of financial outcomes or investor confidence within the sector. These findings highlight the limited market responsiveness to ESG information and underscore the need for improved disclosure quality and standardisation. The study contributes sector-specific evidence from an emerging market and identifies directions for future research on ESG reporting practices},
keywords = {Corporate Governance, ESG Disclosure, Financial Performance, Institutional Investment, Sustainability Reporting},
month = {January},
doi = {https://doi.org/10.64388/IREV9I7-1713880}
}