ESG analysis of Indian companies

Abstract

In recent years, investors have been increasingly focused on ESG factors before making investment decisions. Many funds focus solely on high ESG score companies. NSE has recently come up with a thematic index based on ESG. In our study, we aim to check for any systematic factors associated with high or low ESG scores in Indian context. We will attempt to explain the variance across industries (12 major industries) as well as within the industry (288 publicly listed companies). Before that, we also perform a univariate analysis and compare ESG scores and their variance across sectors. We also test for the impact of ESG scores on the financial performance of the companies and then relate it to a short survey done among IIMA students to then cross-check it with quantitative results obtained. During the course of our project, we have also looked at in-depth breakdown of social factors (%women on board, independent directors, wage disparity etc.) affecting financial performance of the companies.