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August 23, 2025Open Access

ESG Investing – An Evolving Paradigm of Sustainability and Returns

Key Points

ESG investing can enhance long-term returns and reduce volatility while improving corporate accountability.
Evidence from multiple regions indicates ESG integration influences financial performance across various sectors.
The study employs secondary data analysis to explore ESG trends and challenges in global markets, including India.
Challenges like greenwashing and inconsistent rating methodologies highlight the need for standardized metrics and regulation.

Abstract

This paper examines the evolution, implementation, and impact of Environmental, Social, and Governance (ESG) investing in global financial markets. Drawing upon secondary data from international and Indian contexts, it explores ESG’s historical development, key reporting frameworks (UN PRI, GRI, SASB), and regional adoption trends across Europe, the United States, and Asia. The study assesses ESG’s influence on financial performance, risk mitigation, corporate accountability, and sector-specific practices in energy, manufacturing, and technology. While evidence suggests ESG integration can enhance long-term returns, reduce volatility, and strengthen stakeholder trust, the paper also highlights persistent challenges such as inconsistent rating methodologies, greenwashing, and profit–purpose trade-offs. Policy implications include the need for standardized global ESG metrics, enhanced disclosure regulations, and technological innovations in ESG analytics. The findings underscore that ESG investing is not merely an ethical choice but a strategic imperative, with the potential to redefine value creation in modern finance.

ESG Investing – An Evolving Paradigm of Sustainability and Returns

Key Points

Abstract

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