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VOL. 8, ISSUE 3 (2026)
Do sustainable business practices enhance financial performance? Evidence from selected Indian companies
Authors
Srijita Mandal
Abstract
This study examines the connection between financial success and corporate sustainability practices in a sample of top Indian corporations registered on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The study, which employs a mixed-methods approach, examines Environmental, Social, and Governance (ESG) scores along with important financial performance metrics, such as Return on Equity (ROE), Return on Assets (ROA), Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), and Tobin's Q, for a sample of ten well-known Indian companies in various industries over a five-year period (2020–2025).
The findings demonstrate a statistically significant positive correlation between higher ESG ratings and better long-term financial success, particularly in sectors like banking, energy, fast-moving consumer goods (FMCG), automobiles, infrastructure, and information technology. The study also shows that financial outcomes are better predicted by environmental performance and governance quality than by social performance alone. Additionally, policy proposals for investors, business executives, and regulators looking to incorporate sustainability as a strategic lever for financial value generation in the Indian context are included in the paper's conclusion.
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Pages:63-69
How to cite this article:
Srijita Mandal "Do sustainable business practices enhance financial performance? Evidence from selected Indian companies". International Journal of Commerce and Economics, Vol 8, Issue 3, 2026, Pages 63-69
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