Purpose : The study examined the extent to which environmental, social, and governance considerations influenced the investment decisions of finance professionals in India and assessed whether these considerations were associated with the financial performance of listed firms.

Design/Methodology/Approach : A structured questionnaire was administered to finance professionals, and their open-ended responses were analyzed using textual and word-frequency analysis. In addition, panel data for 55 publicly traded Indian firms across select sectors over 2019–2024 were analyzed using panel regression models, with firm performance proxied by return on equity, return on assets, and Tobin's Q, controlling for leverage, firm size, firm age, liquidity, and working capital cycle. A fixed- or random-effects specification was selected separately for each outcome using the Hausman test.

Findings : Governance considerations received greater emphasis from respondents than environmental and social considerations. The panel results did not support a uniform positive relationship between sustainability scores and firm performance. The score was negatively associated with return on equity in the preferred random-effects model, but was statistically insignificant for return on assets in the preferred fixed-effects model and for Tobin’s Q.

Practical Implications : The results suggested that investors, lenders, managers, and regulators should evaluate sustainability information jointly with financial fundamentals rather than treating a higher sustainability score as an automatic indicator of superior short-term performance.

Originality/Value : The study combined perceptual survey evidence from finance professionals with firm-level empirical evidence on the ESG–performance relationship, offering a more nuanced picture than the predominantly positive associations reported in prior literature.

1. Abedin, S. H., Haque, H., Shahjahan, T., & Kabir, M. N. (2022). Institutional ownership and firm performance: Evidence from an emerging economy. Journal of Risk and Financial Management, 15(12), 567. https://doi.org/10.3390/jrfm15120567
2. Al-Hajri, M., & Al-Enezi, F. (2019). The association between corporate social responsibility disclosure and accounting-based financial performance: Kuwaiti evidence. Investment Management and Financial Innovations, 16(1), 1–13. https://doi.org/10.21511/imfi.16(1).2019.01
3. Alsayegh, M. F., Abdul Rahman, R., & Homayoun, S. (2020). Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability, 12(9), 3910. https://doi.org/10.3390/su12093910
4. Al-Tarawneh, A., Tayeh, M., Iskandrani, M., & Obeidat, M. (2024). The impact of ESG scores on corporate financial performance: A study of non-financial firms listed in the UK. Asian Economic and Financial Review, 14(11), 852–867. https://doi.org/10.55493/5002.v14i11.5229
5. Bakhtiari, S., Breunig, R., Magnani, L., & Zhang, J. (2020). Financial constraints and small and medium enterprises: A review. Economic Record, 96(315), 506–523. https://doi.org/10.1111/1475-4932.12560
6. Baltagi, B. H., & Li, Q. (1995). Testing AR(1) against MA(1) disturbances in an error component model. Journal of Econometrics, 68(1), 133–151. https://doi.org/10.1016/0304-4076(94)01646-H
7. Bansal, P. (2005). Evolving sustainably: A longitudinal study of corporate sustainable development. Strategic Management Journal, 26, 197–218. https://doi.org/10.1002/smj.441
8. Bell, A., Fairbrother, M., & Jones, K. (2019). Fixed and random effects models: Making an informed choice. Quality & Quantity, 53, 1051–1074. https://doi.org/10.1007/s11135-018-0802-x
9. Benlemlih, M. (2019). Corporate social responsibility and dividend policy. Research in International Business and Finance, 47, 114–138. https://doi.org/10.1016/j.ribaf.2018.07.005
10. Berry, T. C., & Junkus, J. C. (2013). Socially responsible investing: An investor perspective. Journal of Business Ethics, 112, 707–720. https://doi.org/10.1007/s10551-012-1567-0
11. Bhavnani, B., & Gola, K. R. (2026). Impact of ESG performance on financial performance: Evidence from 141 Indian companies. Prabandhan: Indian Journal of Management, 19(6), 60–76. https://doi.org/10.17010/pijom/2026/v19i6/174620
12. Capelle-Blancard, G., & Monjon, S. (2012). Trends in the literature on socially responsible investment: Looking for the keys under the lamppost. Business Ethics: A European Review, 21, 239–250. https://doi.org/10.1111/j.1467-8608.2012.01658.x
13. Chairani, C., & Siregar, S. V. (2021). The effect of enterprise risk management on financial performance and firm value: The role of environmental, social and governance performance. Meditari Accountancy Research, 29(3), 647–670. https://doi.org/10.1108/MEDAR-09-2019-0549
14. Chebbi, K. (2024). Examining the interplay of sustainable development, corporate governance, and stock price crash risk: Insights from ESG practices. Sustainable Development, 32(1), 1291–1309. https://doi.org/10.1002/sd.2733
15. Chelawat, H., & Trivedi, I. V. (2016). The business value of ESG performance: The Indian context. Asian Journal of Business Ethics, 5, 195–210. https://doi.org/10.1007/s13520-016-0064-9
16. Chen, Z., & Xie, G. (2022). ESG disclosure and financial performance: Moderating role of ESG investors. International Review of Financial Analysis, 83, 102291. https://doi.org/10.1016/j.irfa.2022.102291
17. Chugh, L. C., & Meador, J. W. (1984). The stock valuation process: The analysts' view. Financial Analysts Journal, 40(6), 41–48. https://doi.org/10.2469/faj.v40.n6.41
18. Coad, A., Holm, J. R., Kraft, J., & Quatraro, F. (2018). Firm age and performance. Journal of Evolutionary Economics, 28, 1–11. https://doi.org/10.1007/s00191-017-0532-6
19. Creswell, J. W. (1999). Mixed-method research: Introduction and application. In Handbook of educational policy (pp. 455–472). Academic Press.
20. Datta, S., Doan, T., Guha, A., Iskandar-Datta, M., & Kwon, M. J. (2023). CFO credentials, stock market signalling, and firm performance. International Journal of Managerial Finance, 19(3), 539–571. https://doi.org/10.1108/IJMF-11-2021-0571
21. Dayal, S., Soni, T. K., Aggarwal, R., & Hotwani, R. (2024). Linking ESG disclosure to firm performance and risk: An international perspective. Indian Journal of Finance, 18(11), 36–55. https://doi.org/10.17010/ijf/2024/v18i11/174641
22. De la Fuente, G., Ortiz, M., & Velasco, P. (2022). The value of a firm's engagement in ESG practices: Are we looking at the right side? Long Range Planning, 55(4), 102143. https://doi.org/10.1016/j.lrp.2021.102143
23. Dewasiri, N. J., Weerakoon, Y. K. B., & Azeez, A. A. (2018). Mixed methods in finance research: The rationale and research designs. International Journal of Qualitative Methods, 17(1). https://doi.org/10.1177/1609406918801730
24. Dhanesh, G. S. (2015). Why corporate social responsibility? An analysis of drivers of CSR in India. Management Communication Quarterly, 29(1), 114–129. https://doi.org/10.1177/0893318914545496
25. Dua, P., & Nainwal, N. (2024). Does the market reward corporate environmentalism? Evidence from Indian IT firms. Indian Journal of Finance, 18(6), 46–61. https://doi.org/10.17010/ijf/2024/v18i6/173968
26. Dwibedi, P., Pahi, D., & Mishra, A. P. (2025). Corporate environmental, social, and governance disclosure and performance dynamics: An empirical analysis of BRICS nations. Indian Journal of Finance, 19(2), 27–44. https://doi.org/10.17010/ijf/2025/v19i2/174769
27. Eccles, N. S., & Viviers, S. (2011). The origins and meanings of names describing investment practices that integrate a consideration of ESG issues in the academic literature. Journal of Business Ethics, 104(3), 389–402. https://doi.org/10.1007/s10551-011-0917-7
28. Egbunike, C. F., & Okerekeoti, C. U. (2018). Macroeconomic factors, firm characteristics and financial performance: A study of selected quoted manufacturing firms in Nigeria. Asian Journal of Accounting Research, 3(2), 142–168. https://doi.org/10.1108/AJAR-09-2018-0029
29. Elkington, J. (2004). Enter the triple bottom line. In A. Henriques & J. Richardson (Eds.), The triple bottom line: Does it all add up? (pp. 1–16). Earthscan.
30. Eurosif. (2014). European SRI Study 2014. European Sustainable Investment Forum. https://www.eurosif.org/wp-content/uploads/2022/03/Eurosif-SRI-Study-2014.pdf
31. Farooq, O. (2015). Financial centers and the relationship between ESG disclosure and firm performance: Evidence from an emerging market. Journal of Applied Business Research, 31(4), 1239–1244. https://doi.org/10.19030/JABR.V31I4.9298
32. Fernandes, S., Sathish, M., & Shrivastava, P. (2024). Effect of consciousness in sustainable consumption habits on purchase intention of green products: Comparison study between India and USA. Indian Journal of Marketing, 54(10), 8–24. https://doi.org/10.17010/ijom/2024/v54/i10/174602
33. Giese, G., Lee, L. E., Melas, D, Nagy, Z., & Nishikawa, L. (2019). Foundations of ESG investing: How ESG affects equity valuation, risk, and performance. The Journal of Portfolio Management, 45, 69–83. https://doi.org/10.3905/jpm.2019.45.5.069
34. Gregory, A., Tharyan, R., & Whittaker, J. (2014). Corporate social responsibility and firm value: Disaggregating the effects on cash flow, risk, and growth. Journal of Business Ethics, 124, 633–657. https://doi.org/10.1007/s10551-013-1898-5
35. Gupta, S., Singh, G., & Chandel, A. (2024). Firm value and mandatory risk disclosure: An empirical investigation of listed companies under Ind-AS107 in India. Indian Journal of Finance, 18(11), 24–35. https://doi.org/10.17010/ijf/2024/v18i11/174640
36. Gupta, V. (2024). Corporate governance and credit risk: Evidence on Indian firms using mixed method. Prabandhan: Indian Journal of Management, 17(7), 8–22. https://doi.org/10.17010/pijom/2024/v17i7/173633
37. Habib, A. M. (2023). Do business strategies and environmental, social, and governance (ESG) performance mitigate the likelihood of financial distress? A multiple mediation model. Heliyon, 9(7), e17847. https://doi.org/10.1016/j.heliyon.2023.e17847
38. Jabbouri, I., & Almustafa, H. (2021). Corporate cash holdings, firm performance and national governance: Evidence from emerging markets. International Journal of Managerial Finance, 17(5), 783–801. https://doi.org/10.1108/IJMF-07-2020-0342
39. Jain, S., Dhillon, L. K., Aggarwal, R., & Bagga, T. (2023). Corporate governance mechanism, ownership structure, and firm performance: Evidence from India. Indian Journal of Finance, 17(9), 25–40. https://doi.org/10.17010/ijf/2023/v17i9/173182
40. Jick, T. D. (1979). Mixing qualitative and quantitative methods: Triangulation in action. Administrative Science Quarterly, 24(4), 602–611. https://www.jstor.org/stable/2392366
41. Johnsen, B. D. (2003). Socially responsible investing: A critical appraisal. Journal of Business Ethics, 43, 219–222. https://doi.org/10.1023/A:1022998232503
42. Joshi, B., & Joshi, H. (2024). Do corporate cash holdings matter for ESG performance? Empirical evidence from India. Prabandhan: Indian Journal of Management, 17(10), 8–24. https://doi.org/10.17010/pijom/2024/v17i10/173993
43. Killins, R. N. (2020). Firm-specific, industry-specific and macroeconomic factors of life insurers' profitability: Evidence from Canada. The North American Journal of Economics and Finance, 51, 101068. https://doi.org/10.1016/j.najef.2019.101068
44. KPMG Hong Kong. (2020). Integrating ESG into your business. KPMG CLP. https://assets.kpmg.com/content/dam/kpmg/cn/pdf/en/2020/01/integrating-esg-into-your-business.pdf
45. Larcker, D. F., Lee, L.-E., Seru, A., & Tayan, B. (2024). 2024 institutional investor survey on sustainability. Stanford Graduate School of Business.
46. Liu, Y., Li, W., & Meng, Q. (2023). Influence of distracted mutual fund investors on corporate ESG decoupling: Evidence from China. Sustainability Accounting, Management and Policy Journal, 14(1), 184–215. https://doi.org/10.1108/SAMPJ-10-2021-0401
47. Mallinguh, E., Wasike, C., & Zoltan, Z. (2020). The business sector, firm age, and performance: The mediating role of foreign ownership and financial leverage. International Journal of Financial Studies, 8(4), 79. https://doi.org/10.3390/ijfs8040079
48. Manaswi, K., Singh, A., & Gupta, V. (2023). Building a better future with sustainable investments: Insights from recent research. Indian Journal of Human Development, 17(2), 320–343. https://doi.org/10.1177/09737030231194836
49. Marzuki, A., Mat Nor, F., Ramli, N. A., Ali Basah, M. Y., & Ab Aziz, M. R. (2023). The influence of ESG, SRI, ethical, and impact investing activities on portfolio and financial performance—Bibliometric analysis/mapping and clustering analysis. Journal of Risk and Financial Management, 16(7), 321. https://doi.org/10.3390/jrfm16070321
50. Minimol, M. C., Akhila, K. V., & Kavya, N. P. (2025). Firm performance in India: Does sustainability reporting matter? Indian Journal of Finance, 19(3), 8–25. https://doi.org/10.17010/ijf/2025/v19i3/174847
51. Nadeem, F., & Singh, A. (2024). ESG investing from the perspective of 4Ps of marketing. Prabandhan: Indian Journal of Management, 17(6), 63–77. https://doi.org/10.17010/pijom/2024/v17i6/173561
52. OECD. (2020). Integrating ESG factors in the investment decision-making process of institutional investors. In OECD business and finance outlook 2020. OECD Publishing.
53. Pal, A., Singh, V. V., Tiwari, C. K., & Bhat, M. A. (2025). Decoding consumer perceptions toward green financial products using analytical hierarchy process. Indian Journal of Marketing, 55(9), 29–42. https://doi.org/10.17010/ijom/2025/v55/i9/175450
54. Park, J. G., Park, K., Noh, H., & Kim, Y. G. (2023). Characterization of CSR, ESG, and corporate citizenship through a text mining-based review of literature. Sustainability, 15(5), 3892. https://doi.org/10.3390/su15053892
55. Raimo, N., Caragnano, A., Zito, M., Vitolla, F., & Mariani, M. (2021). Extending the benefits of ESG disclosure: The effect on the cost of debt financing. Corporate Social Responsibility and Environmental Management, 28(4), 1412–1421. https://doi.org/10.1002/csr.2134
56. Rossi, M. (2016). The impact of age on firm performance: A literature review. Corporate Ownership & Control, 13(2–1), 217–223. http://doi.org/10.22495/cocv13i2c1p3
57. Sahut, J. M., & Pasquini-Descomps, H. (2015). ESG impact on market performance of firms: International evidence. Management International, 19(2), 40–63. https://doi.org/10.7202/1030386ar
58. Santhi, P., Sasirekha, P., & Anija, J. (2024). A causal linkage between corporate sustainability performance and financial performance of select IT & ITeS companies in India. Indian Journal of Finance, 18(2), 43–59. https://doi.org/10.17010/ijf/2024/v18i2/173520
59. Sharma, D., & Chakraborty, S. (2024). Corporate social responsibility and financial performance: Moderating impact of product market competition. Indian Journal of Finance, 18(7), 8–24. https://doi.org/10.17010/ijf/2024/v18i7/174030
60. Shiller, R. J. (2013). Capitalism and financial innovation. Financial Analysts Journal, 69(1), 21–25. https://doi.org/10.2469/faj.v69.n1.4
61. Singh, S., Dutta, S., & Sharma, D. (2024). Mapping the landscape of sustainability reporting: A bibliometric analysis. Prabandhan: Indian Journal of Management, 17(11), 61–77. https://doi.org/10.17010/pijom/2024/v17i11/174023
62. Steblianskaia, E., Vasiev, M., Denisov, A., Bocharnikov, V., Steblyanskaya, A., & Wang, Q. (2023). Environmental-social-governance concept bibliometric analysis and systematic literature review: Do investors becoming more environmentally conscious? Environmental and Sustainability Indicators, 17, 100218. https://doi.org/10.1016/j.indic.2022.100218
63. Van Brecht, D., Maga, A., Luciani, K., Sahakijpicharn, D., & Semmerling, A. (2018). Exploring the link between environmental, social and governance (ESG) disclosure and market value of the firm: Evidence from Thai listed companies. ASEAN Journal of Management and Innovation, 5(2), 95–106. https://doi.org/10.14456/ajmi.2018.27
64. van Duuren, E., Plantinga, A., & Scholtens, B. (2016). ESG integration and the investment management process: Fundamental investing reinvented. Journal of Business Ethics, 138, 525–533. https://doi.org/10.1007/s10551-015-2610-8
65. Vieira, E. S., Neves, M. E., & Dias, A. G. (2019). Determinants of Portuguese firms' financial performance: Panel data evidence. International Journal of Productivity and Performance Management, 68(7), 1323–1342.
66. Wang, H., Jiao, S., & Ma, C. (2024). The impact of ESG responsibility performance on corporate resilience. International Review of Economics & Finance, 93, 1115–1129. https://doi.org/10.1016/j.iref.2024.05.033
67. Wang, R., & Hu, Y. (2025). Green behaviours among employees in Chinese e-commerce companies: Impact of environmental, social, and governance (ESG) performance. Sustainability, 17(3), 940. https://doi.org/10.3390/su17030940
68. Xie, J., Nozawa, W., Yagi, M., Fujii, H., & Managi, S. (2019). Do environmental, social, and governance activities improve corporate financial performance? Business Strategy and the Environment, 28, 286–300. https://doi.org/10.1002/bse.2224