Industry-wise Analysis of Sustainability Disclosure and Financial Performance: Evidence from Selected Indian Companies

Abstract

The rising focus on environmental, social and governance (ESG) practices has heightened the significance of sustainability disclosure in corporate reporting. This research examines sustainability disclosure levels and their correlation with financial performance in selected Indian industries from 2020-21 to 2024-25. Focusing on Automobile, Cement, Information Technology and Oil and Gas sectors, the study uses a Sustainability Disclosure Index (SDI) and financial metrics like Return on Assets (ROA) and Return on Equity (ROE). Employing descriptive statistics, correlation analysis and One-Way ANOVA, the findings show increased sustainability disclosure across industries, driven by ESG awareness and regulations. The IT sector leads in disclosure and financial performance. ANOVA results indicate disclosure doesn't significantly vary across industries but improves over time while financial performance shows inter-industry differences. Correlation analysis reveals a moderate positive link between sustainability disclosure and profitability suggesting better disclosure often aligns with better financials. The study concludes sustainability disclosure is integral to Indian corporate reporting contributing to long-term sustainability with varying immediate financial impacts.