Establish the Relationship Between Green Disclosures and Corporate Financial Performance

Abstract

Management of environmental performance may be enhanced with the use of environmental reporting. The qualitative and quantitative criteria that must be considered to determine the depth and breadth of such reporting. The purpose of the research is to ascertain whether environmental disclosures have an impact on the bottom line of businesses. 58 businesses from the Nifty 100 Index's manufacturing and non-financial services sectors were chosen for the research. The aforementioned 58 firms' annual reports, company websites, sustainability reports, etc. served as data sources. The research found no statistically significant connection between green disclosures and net profit margin. Green disclosures and earnings per share have no meaningful correlation. Return on capital employed is positively correlated with green disclosures, whereas return on assets is negatively correlated with green disclosures. Environmental, social, and governance (ESG) performance is measured using the Thomson Reuters Eikon ESG disclosure score, whereas financial performance is measured using the return on assets (ROA) and tobin's q ratio.