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Mandatory sustainability reporting and firm performance: A quasi-natural experiment

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  • Bhaskar, Ratikant
  • Chortane, Sana Gaied
  • Kumar, Ashish
  • Pandey, Dharen Kumar

Abstract

Using a quasi-natural experimental analysis of the sustainability reporting mandate in India, we analyze 3690 firms (2018‒2024) to reveal that mandated ESG disclosure signals enhanced transparency and legitimacy, leading to higher market valuations. However, compliance imposes short-term profitability costs due to a trade-off between reputational benefits and operational burdens. Additionally, the findings show that the performance implications of mandatory BRSR disclosure are heterogeneous across firms and operate through a reputational channel, underscoring the conditional and mechanism-driven nature of ESG value creation.

Suggested Citation

  • Bhaskar, Ratikant & Chortane, Sana Gaied & Kumar, Ashish & Pandey, Dharen Kumar, 2026. "Mandatory sustainability reporting and firm performance: A quasi-natural experiment," Finance Research Letters, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:finlet:v:94:y:2026:i:c:s1544612326002096
    DOI: 10.1016/j.frl.2026.109678
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    Cited by:

    1. Serhii Ostapchuk & Lesia Voliak, 2026. "Consequences of the Introduction of Mandatory Sustainability Reporting: A Critical Review of International Practice," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 36-44, March.

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