This study examines the empirical relationship between ESG (Environmental, Social, and Governance) scores and stock market performance for 30 NIFTY100 companies across six sectors in India over the period 2019–2024. Using Pearson correlation, Ordinary Least Squares (OLS) regression, and one-way ANOVA, the study finds a statistically significant positive relationship between ESG scores and long-term stock returns (R² = 0.784, p < 0.001 for 5-year returns). The P/B ratio shows a significant positive association with ESG scores, while the P/E ratio does not. IT and FMCG sectors lead in ESG performance and correspondingly exhibit superior returns. The findings provide empirical support for the value-creation hypothesis of ESG investing in the Indian equity market and carry implications for portfolio managers, institutional investors, and policymakers.
Sivaranjith Thekkot Sivaraman (Tue,) studied this question.
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