Published Online:January 2026
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP030126
DOI:10.71329/IUPJARAP/2026.25.1.50-69
Author Name:Khajabee Pathan and Shaiku Shahida Saheb
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:50-69
The paper explores the indirect link between environmental, social and governance (ESG) performance and a company’s value, with profitability indicators such as return on assets (ROA), return on equity (ROE) and return on capital employed (ROCE) serving as mediators. It uses annual data from 124 publicly listed Indian companies across various sectors from 2019 to 2023. The study employed the pooled mean group-autoregressive distributed lag (PMG-ARDL) model to estimate the long- and short-run results, and used Sobel test for mediation analysis. The findings indicate a significant long-term effect of the independent variables on the dependent variables, and also demonstrate the mediating role of ROA and ROCE between ESG performance and enterprise value (EV). The study findings provide insights for stakeholders, decision-makers, legislators, and researchers on the impact of ESG on firm value.
Environmental, social, and governance (ESG) covers a broad range of topics, including environmental concerns such as climate change, energy and water usage, and carbon emissions; social responsibility concerns like fair trade, human rights, product safety, gender equality, and health and safety; and corporate governance matters such as board independence, corruption, and bribery, reporting and disclosure, and shareholder protection (Liu et al., 2022).