ESG disclosure & firm performance: A study of pre and post COVID period

Purpose: This study investigates the effect of Environmental, Social, and Governance Disclosure (ESGD) on firm performance (FP) in India, while assessing sectoral differences and variations between the pre- and post-COVID-19 periods. The study further examines whether ESG disclosure patterns changed following the pandemic.Methodology: The analysis is based on panel data from 55 non-financial NSE-listed firms covering 2016–2024. ESGD scores were constructed using detailed content analysis grounded in the GRI 2022 framework. Firm performance was measured using the Market-to-Book Value ratio. Fixed Effects Models, supported by Welch’s t-test, descriptive statistics, correlation analysis, and diagnostic tests for heteroskedasticity, multicollinearity, and autocorrelation, were employed. Sector-wise and temporal regressions were conducted.Results: ESG disclosures increased significantly after COVID-19. ESGD positively influences firm performance for the full sample and the manufacturing sector, but shows no significant effect in the service sector. Pre-COVID results indicate a positive ESG–FP relationship, whereas post-COVID results show a negative and insignificant link, suggesting that pandemic-era sustainability reporting may be perceived as compliance-driven.Conclusions: This study investigates the relationship between ESG disclosure and firm performance in India, an underexplored emerging market. Using large Indian firms across sectors and pre- and post-COVID periods, the results show that ESG disclosure enhances firm performance in manufacturing firms but not in service firms, highlighting sectoral differences in ESG materiality. The weakened relationship after COVID-19 suggests that external shocks moderate the financial benefits of ESG practices. These findings support stakeholder and legitimacy theories, indicating that ESG disclosure creates value when aligned with stakeholder expectations and regulatory sensitivity. The study provides important implications for managers and policymakers to strengthen strategic ESG integration and sector-specific regulation under India’s BRSR framework.