Investigating the moderating role of industrial growth in the ESG-financial performance relationship: Evidence from Indian firms

Abstract

This paper examines the evolving relationship between Environmental, Social, and Governance (ESG) disclosures and financial performance in Indian firms, with a particular focus on the moderating role of industrial growth. In the context of India’s diverse and fast-developing economy, firms across different industries are adopting ESG practices to enhance corporate responsibility and improve financial outcomes. However, industrial growth varies significantly across sectors, influencing how firms approach ESG reporting and the corresponding financial benefits. This descriptive analysis explores how firms in high-growth industries are more likely to see positive financial outcomes from their ESG disclosures compared to those in slower-growing sectors. The paper concludes with insights on the importance of ESG disclosure for long-term financial sustainability in India’s industrial landscape.