Published Online:April 2025
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG030425
DOI:10.71329/IUPJCG/2025.24.2.49-63
Author Name:Sawrav Saha and Lalita Mohan Mohapatra
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:49-63
The study scrutinizes the vital factors influencing the environmental, social and governance (ESG) reporting quality. The paper considered 197 Indian corporates out of NSE 500 companies for the period 2012 to 2019. The data was obtained from Bloomberg. Levin-Lin-Chu assessment results confirmed the absence of unit root issues for the variables. Hausman specification test implied the appropriateness of Fixed Effect (FE) Model. FE estimation showed that corporate profitability (proxied by return on equity, earnings per share, and return on assets) and board size (proxy for corporate governance) did not have any effect on ESG disclosure. However, market capital (MC), total assets (TA) and sales growth (SG) had a significant effect on ESG, and only SG had negative effect. The study also analyzed the associations at five different sectoral levels. Different results were obtained at the sectoral level. Board size (BS) had a negative association with ESG for services sector and positive association for healthcare sector. Panel GMM was applied to minimize endogeneity issues.
Companies boost their profitability by concentrating on the non-financial features to safeguard investors’ interest such as mitigation of risks, particularly risks associated with environmental, social, and governance (ESG). ESG indicates how business and investors integrate these issues into their operations (Wang et al., 2023).