Essays on ESG Reporting Identifying the Key Performance Indicators and Measuring its Impact on Firm Performance

Abstract

The corporate sector across the global is undergoing a paradigm shift in terms of the newlineinformation disclosed by the organizations. The stakeholder activism is demanding the firms newlineto be more sustainable in its approach towards achieving long term growth. This increased newlineawareness and the need for long-term survival in the market has forced the organizations to newlineadopt a more holistic approach when it comes to disclosing the firm related information. This newlinetransversal of firms towards a more modernistic approach of information disclosure has newlinegarnered both praise and criticism from the society at large. On one hand, wherein the market newlineand its forces are lauding this step, questions are being raised about the integrity of such newlinemethods. newlineThe academia and corporate sector are in a constant state of upheaval and discussion about the newlineacceptability and comparability of such an approach. Contentions are being made about the newlineauthenticity, reliability, and validity of the non-financial disclosures made by the firms both in newlineIndia as well as abroad. The studies carried out so far in this domain have yielded ambiguous newlineand inconclusive results bifurcating the literature into three main streams based on the type of newlineassociation reported: (a) positive; (b) negative, and (c) neutral. The justifications for such newlineequivocality in the results are attributed to the absence of a common metric that will help in newlinepeer comparison of firms on the quality of sustainability-related disclosures. Another reason newlinethat is recently being cited for the lack of clarity on the subject under discussion is the nature newlineof the association being studied. Most of the studies have so far focused on empirically newlineexamining the direct relationship between sustainability reporting and its impact on firm newlineperformance. newlineAgainst the given backdrop, this study aims at analyzing the relationship between the most newlinecommonly used measure of sustainability reporting viz., Environment, Social and Governance newline(ESG) and Corporate Financial Performance (CFP). It employs the use of both an