Impact of ESG Rating on Financial Performance of NIFTY 50 Companies

Abstract

Sustainable and responsible investment techniques have gained prominence as a result of growing public interest in issues related to environmental security and social progress. Responsible investing takes into consideration Environmental, Social, and Governance (ESG) factors to reduce risk and boost returns. This research examines how ESG Risk Rating affects NIFTY 50 Firms financial performance as measured by return on assets, return on equity, return on investment, earnings per share, and net profit margin. The Pooled OLS regression method examined how ESG Risk Rating affected corporate financial performance. The study found that poor ESG ratings lower financial success.  This study has significance for both practitioners and policymakers seeking to boost company ESG participation.