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Does sustainability payoff? Exploring the influence of corporate sustainability on the financial performance of non-financial Indian companies

Author

Listed:
  • K.P. Sabirali
  • S. Mahalakshmi
  • Jyoti Ranjan Sahoo

Abstract

The relationship between corporate sustainability and financial performance remains a topic of ongoing debate among researchers. This study investigates the influence of corporate sustainability on the financial performance of non-financial Indian companies using a panel dataset of 113 firms from the Nifty200 index over 12 years. Employing a fixed-effects panel regression model, the findings indicate an insignificant relationship between corporate sustainability and financial performance. The insignificance of results may stem from the underdeveloped ESG reporting framework, compliance-driven sustainability initiatives rather than genuine commitments, or the complex and indirect pathways through which sustainability practices influence financial outcomes. These findings highlight the need for stronger regulatory mechanisms and improved sustainability disclosures to enhance transparency and investor confidence in the Indian market.

Suggested Citation

  • K.P. Sabirali & S. Mahalakshmi & Jyoti Ranjan Sahoo, 2025. "Does sustainability payoff? Exploring the influence of corporate sustainability on the financial performance of non-financial Indian companies," American Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 8(3), pages 250-273.
    • Handle: RePEc:ids:amerfa:v:8:y:2025:i:3:p:250-273
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