Title: Does sustainability payoff? Exploring the influence of corporate sustainability on the financial performance of non-financial Indian companies

Authors: K.P. Sabirali; S. Mahalakshmi; Jyoti Ranjan Sahoo

Addresses: Department of Commerce, Central University of Tamil Nadu, 610005, Tamilnadu, India ' Department of Commerce, Central University of Tamil Nadu, 610005, Tamilnadu, India ' IIT Kharagpur, Kharagpur, 721302, West Bengal

Abstract: The relationship between corporate sustainability and financial performance remains a topic of ongoing debate among researchers. This study investigates the influence of corporate sustainability on the financial performance of non-financial Indian companies using a panel dataset of 113 firms from the Nifty200 index over 12 years. Employing a fixed-effects panel regression model, the findings indicate an insignificant relationship between corporate sustainability and financial performance. The insignificance of results may stem from the underdeveloped ESG reporting framework, compliance-driven sustainability initiatives rather than genuine commitments, or the complex and indirect pathways through which sustainability practices influence financial outcomes. These findings highlight the need for stronger regulatory mechanisms and improved sustainability disclosures to enhance transparency and investor confidence in the Indian market.

Keywords: corporate sustainability; financial performance; ESG; environmental, social, and governance; panel data analysis.

DOI: 10.1504/AJFA.2025.146032

American Journal of Finance and Accounting, 2025 Vol.8 No.3, pp.250 - 273

Received: 17 Jul 2024
Accepted: 10 Mar 2025
Published online: 01 May 2025 *