Published Online:April 2026
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG020426
DOI:10.71329/IUPJCG/2026.25.2.41-63
Author Name:Abhishek Sinha, Munawar Sayyad and Rajesh Kumar
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:41-63
The study explores how environmental, social, and governance (ESG) factors affect firm performance in the global information and communication technology (ICT) sector. It examines the influence of ESG practices on financial and operational outcomes. Using panel data from 414 ICT companies over the period 2014-2023, sourced from Thomson Reuters Refinitiv Eikon database, the study employs fixedeffects panel regression models with lagged specifications and robustness checks using two-stage least squares (2SLS) estimation to analyze the impact of ESG ratings on revenue, return on equity, return on assets, and forward price-to-earnings ratio. The results highlight the complex link between ESG factors and financial performance. A strategic alignment is needed to balance immediate costs and long-term gains. The analysis reveals that the governance and social dimensions of ESG have a significant and positive impact on firm revenue, both in the short and long term. Environmental initiatives, while beneficial, tend to yield financial returns over a longer horizon, reflecting the cost-intensive nature of such investments. The study offers practical insights for managers and helps them integrate ESG into decisionmaking for sustainable profitability. It encourages responsible practices that benefit society and maximize stakeholder wealth.
The information and communication technology (ICT) sector has grown rapidly over the past decade. This growth is driven by digital transformation and global connectivity (Abidi et al., 2022). ICT is a cornerstone of the modern economy, enabling innovation and efficiency across industries. However, this expansion has come at a significant environmental cost.