Purpose

This study aims to empirically examine environment, social, and governance (ESG) as an effective strategy to reduce major impediments for a corporation in the form of costs of capital (COC) and systematic risk, especially for emerging markets such as India.

Design/methodology/approach

A sample of 114 Indian firms from eight prominent industries based on Thomson Reuters classification (TRBC) are used in the study. A panel regression with industry-fixed effects is carried out to account for industry heterogeneity. For robustness, the authors also carry out a matched sample analysis.

Findings

The authors observe a negative and significant relationship between ESG performance with COC and systematic risk, respectively. For the pillar-wise analysis, the authors observe that only governance performance is negatively and significantly related to COC whereas the environmental and social performances are negative and insignificant. For ESG pillar level analysis for beta, the authors observe that all pillars are negative and significant, thus making a case for how firms can fine-tune their ESG strategies according to each pillar.

Research limitations/implications

As the ESG concept is still in a very nascent stage, data availability is a definite challenge in India.

Practical implications

As ESG is increasingly becoming relevant for multiple stakeholders, this study aims to provide evidence that can potentially guide the regulators, practitioners, and academicians to address the contemporary needs of these stakeholders, while also doing good for the firm in the traditional sense.

Social implications

The transition to a sustainable economy is a challenge for emerging economies, especially for a country like India where stakeholders are not only varied but also huge in number. With this study's contribution towards an incremental understanding of ESG, Indian regulators and policymakers can bring forward mandates as to ESG compliances that are rewarding for the firms and give them enough impetus towards complying with ESG norms.

Originality/value

The extant literature on ESG majorly discusses the relationship between ESG performance and financial performance. This study addresses the lacuna of the relationship of ESG with COC and beta in the Indian context.

中文翻译：

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通过 ESG 缩小资本成本和贝塔风险障碍：新兴市场研究

目的

本研究旨在实证检验环境、社会和治理 (ESG) 作为一种有效策略，以减少公司资本成本 (COC) 和系统性风险等主要障碍，特别是对于印度等新兴市场。

设计/方法论/途径

该研究使用了基于汤森路透分类 (TRBC) 的 8 个主要行业的 114 家印度公司样本。进行具有行业固定效应的面板回归来解释行业异质性。为了稳健性，作者还进行了匹配样本分析。

发现

作者观察到 ESG 绩效与 COC 和系统风险之间分别存在显着负相关关系。对于支柱分析，作者观察到，只有治理绩效与 COC 呈显着负相关，而环境和社会绩效则呈负相关且不显着。对于 beta 的 ESG 支柱层面分析，作者观察到所有支柱都是负面且重要的，从而为企业如何根据每个支柱微调其 ESG 策略提供了理由。

研究局限性/影响

由于 ESG 概念仍处于非常初级的阶段，数据可用性在印度是一个明确的挑战。

实际影响

随着 ESG 与多个利益相关者的关系日益密切，本研究旨在提供证据，以指导监管机构、从业者和学者满足这些利益相关者的当代需求，同时也为传统意义上的公司带来好处。

社会影响

向可持续经济转型对新兴经济体来说是一项挑战，尤其是像印度这样的国家，因为利益相关者不仅多种多样，而且数量庞大。通过这项研究对加深对 ESG 理解的贡献，印度监管机构和政策制定者可以提出有关 ESG 合规性的要求，这对公司来说是有益的，并为他们遵守 ESG 规范提供足够的动力。

原创性/价值

现有的ESG文献主要讨论ESG绩效与财务绩效之间的关系。本研究解决了印度背景下 ESG 与 COC 和 beta 之间关系的缺陷。