The increasing integration of Environmental, Social, and Governance (ESG) factors into financial markets has reshaped corporate valuation paradigms, particularly in ESG-sensitive sectors such as real estate and construction. This study investigates the impact of ESG activities on the market valuation of thirty-eight listed Indian real estate and construction firms over the period FY 2017–18 to FY 2023–24. Using Bloomberg and CRISIL ESG scores alongside financial data from CMIE Prowess, the analysis employs fixed-effects panel regressions, lagged models, and a difference-in-differences design exploiting SEBI’s 2022 Business Responsibility and Sustainability Report (BRSR) mandate. Results indicate a robust positive association between ESG performance and valuation, measured primarily by Tobin’s Q and Price-to-Book ratios. Governance emerges as the strongest driver of valuation premiums, followed by environmental performance, while social initiatives show weaker market recognition. Evidence further suggests that markets often price ESG improvements with a lag and that mandated disclosure enhances valuation, particularly for previously opaque firms. The findings contribute to ESG–valuation literature in emerging markets and provide practical insights for regulators and corporate managers balancing sustainability with shareholder value