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Purpose: The impact of corporate sustainability practices on the firm performance of Indian-listed businesses was investigated in this study.
Theoretical Framework: The present research investigated the stakeholder theory’s application to corporate sustainability initiatives. Many recent studies have claimed that the theory encompasses a wide range of other elements that can affect the firm's valuation in addition to its purely economic value (Martin, 2022; Bodhanwala, 2022 ). To ensure firm performance in the current dynamic business environment, it is crucial to evaluate the scope of value creation from a stakeholder perspective in this context.
Design/Methodology/Approach: The corporate sustainability practices of 65 listed Indian firms were evaluated using the ESG score from the refinitive database of Thomson Reuters, and the firm performance was evaluated using the ROA (return on assets) score from the Prowess IQ database. The presented hypotheses were tested using single and multiple regression models for the study period of 2017–2021.
Findings: Findings suggest that the sustainability practices of listed companies in India had a significant positive impact on the firm performance. On detailed analysis, it was further found that among the three sustainability variables, social and governance activities of firms had a significant positive impact on firm performance while environmental activities had a negative insignificant association with firm performance.
Research, Practical & Social Implications: The findings of this study highlight the importance of supporting sustainable enterprises and properly reporting them in order to enhance firm-level performance. The study’s findings may also assist the business in piquing the interest of various stakeholders in reference to its sustainability initiatives and aid it in luring more investors.
Originality/Value: The study’s empirical data can be used by different governmental and regulatory agencies to help them take the necessary steps to support different sustainable business practices.
