Title: ESG disclosure and financial success: a comparative dive into India's manufacturing and service sectors

Authors: Santi Gopal Maji; Prachi Lohia

Addresses: Department of Commerce, Tezpur University, Tezpur-784028, Assam, India ' Department of Commerce, Tezpur University, Tezpur-784028, Assam, India

Abstract: This paper examines the financial impact of environmental, social, and governance (ESG) disclosure in Indian manufacturing and service companies. The study employs a panel approach by utilising secondary data for a sample of 209 Indian-listed firms for 2020 and 2021. Empirical analysis conducted using suitable panel regression models reveals a significant positive financial impact of ESG disclosure in both sectors. However, manufacturing firms display improved market value while the service-sector firms experience higher accounting profits. This study highlights the role of a firm's sector in explaining the consequent financial impact of ESG disclosure. It also emphasises the need for higher but material ESG disclosure and heightened investor awareness. Notably, this study represents the first comparative analysis of ESG's effect on the financial performance of Indian manufacturing and service firms by considering indigenous ESG ratings from the Credit Rating Information Services of India Limited (CRISIL).

Keywords: ESG; financial performance; manufacturing firms; service firms; CRISIL; India.

DOI: 10.1504/IJSE.2025.145290

International Journal of Sustainable Economy, 2025 Vol.17 No.2, pp.221 - 238

Received: 29 Aug 2023
Accepted: 23 Oct 2023
Published online: 31 Mar 2025 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article