Interlinkage between environmental social governance performance and sustainability: insights from the Indian banking sector

This study investigates the influence of Environmental, Social, and Governance performance on the financial sustainability of Indian banks publicly listed on the Bombay Stock Exchange from 2018 to 2023. The study employed regression analysis, incorporating all assumptions, to investigate the correlation between ESG factors and financial performance measured by return on assets and return on net worth. The study findings indicate that there is no statistically significant relationship between the environmental and financial performance. An adverse impact of social performance on financial performance is observed. Meanwhile, governance performance greatly enhances financial returns. The study highlights the significance of robust governance practices in ensuring profitability. The study is specifically focused on Indian banks, and thus findings of this study are mainly emphasised on the regulatory environment and economic significance of banks in India, providing a valuable understanding of how environmental, social, and governance factors impact their financial sustainability.