Title: EVALUATING THE IMPACT OF ESG ON FINANCIAL PERFORMANCE OF CORPORATIONS
Author: Shivani Ram More
Abstract:

This study examines the connection between a company’s financial performance in a variety of industries and its Environmental, Social, and Governance (ESG) performance. The study examines the impact of ESG scores on important financial metrics like Return on Equity (ROE), Return on Assets (ROA), and Tobin’s Q using secondary data from listed companies between 2018 and 2023. The results show a strong positive correlation between corporate financial outcomes and overall ESG performance, suggesting that companies with more robust sustainability strategies typically attain higher profitability and market valuation. Furthermore, the influence of social and governance aspects is greater than that of environmental elements. The findings, which highlight ESG as a strategic driver of long-term competitiveness rather than a compliance need, are consistent with the Stakeholder and Resource-Based theories. The study provides valuable insights for managers, investors, and policymakers promoting sustainable business models that align financial success with corporate responsibility.

Keywords: Environmental, Social, and Governance (ESG), Finance, Financial Performance
DOI: https://doi.org/10.38193/IJRCMS.2026.SP8121
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Date of Publication: 21-01-2026
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Published Vol & Issue: Volume 8 Issue 1 January 2026