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Does it matter to be a part of the sustainability index?

Author

Listed:
  • Chaman Shrestha
  • Panagiotis Andrikopoulos
  • Narayan Prasad Aryal

Abstract

We study how companies’ sustainability performance affects their future operational and financial performance. Using firms’ inclusion in the FTSE4Good index series as an indicator of sustainability performance, a quasi-natural experiment shows that sustainability has a beneficial effect on firms’ long-term financial performance. Our findings show a notable rise in the companies’ profitability following their addition to the sustainability index. Additionally, companies that are part of the sustainability index are considered to have higher value compared to firms that are not part of a sustainability benchmark.

Suggested Citation

  • Chaman Shrestha & Panagiotis Andrikopoulos & Narayan Prasad Aryal, 2025. "Does it matter to be a part of the sustainability index?," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 15(3), pages 666-687, July.
    • Handle: RePEc:taf:jsustf:v:15:y:2025:i:3:p:666-687
    DOI: 10.1080/20430795.2024.2401357
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