Corporate sustainability reporting under BRSR: Impact on financial performance of listed Indian Firms

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Sharma, Dr. Pankajkumar Anawade This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8917099/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract One of key tools that makes corporate governance in India more transparent and accountable is corporate sustainability reporting. The impact of Business Responsibility & Sustainability Reporting (BRSR) on financial performance of Indian listed companies is examined in this study. The study uses a quantitative methodology and is based on a panel data set of 150 listed businesses from National Stock Exchange for the fiscal years 2021–22 to 2023–24. Four variables of the selected financial performance indicators such as Return on Equity (ROE), Return on Assets (ROA), Net Profit Margin (NPM), & Earnings Per Share (EPS) are used to measure financial performance. This supports our theory that BRSR adoption improves financial performance metrics. Results indicate that there are different relationships between financial performance and the quality of BRSR disclosure, with significant positive correlation with ROA and NPM and a neutral to negative association with ROE in some sectors. Our statistical finding contrast by sectors, while the information technology and banking sectors exhibit strong positive correlations, the manufacturing sectors do not. The study concludes that improvements in long-term sustainability and stakeholder trust arising from BRSR are dependent upon specific industrial sector and are compensated through differential short-term financial impacts. Finance Other Economics BRSR Sustainability Reporting Financial Performance ESG Disclosure Listed Companies 1. Introduction The paradigm of new-age corporate governance, which has transformed business operations in India, was brought about by the shift towards environmental, social, & governance (ESG). To put it another way, Business Responsibility & Sustainability Reporting framework, which was established by SEBI in May 2021, is the largest effort in India to date to standardize sustainability disclosures for Indian listed companies (Kajal & Bansal, 2025). Content Based on Communication Transparency The Business Responsibility & Sustainability Report (BRSR) framework mandates that top 1,000 listed companies by market capitalization provide a quantitative disclosure of their ESG performance. This is significant departure from previous voluntary Business Responsibility Report (Rao et al, 2023). BRSR adheres to the global framework for sustainability reporting, which includes Task Force on Climate Related Financial Disclosures, Sustainability Accounting Standards Board, & Global Reporting Initiative. By integrating Indian firms into the global sustainability ecosystem, this alignment helps them develop a competitive edge and facilitate cross-border investments (Goud, 2025). The framework's nine tenets business ethics, product life cycle, stakeholder involvement, and human rights protection are based on National Guidelines on Responsible Business Conduct. Sustainability reporting has been a subject of wide-ranging academic discussion all over the world, partly due to the inconsistent findings of empirical research into the sustainability reporting-financial performance connection across geographical, industrial and methodological contexts (Fried et al., 2015). Recent studies find positive ESFiG correlation in developed markets, but the story in emerging markets is more complex as there are different challenges as compared to the developed ones. The Indian scenario is also interesting since the country has mandatory CSR provisions in place since 2014 and has recently rolled out mandatory sustainability reporting (Tripathi & Kaur, 2020). There is empirical evidence from Indian markets that sustainability efforts impact corporate financial performance through several channels such as improved reputation, lower operational costs, better access to capital and reduction in regulatory risks (Bodhanwala & Bodhanwala, 2018). On the other hand, the immediate expenses of adopting strong ESG structures monitoring systems, reporting infrastructure, and compliance mechanisms — can also do damage to profitability measures in the short run. Corporate leaders, investors and policymakers will have to be cognisant of these dynamics as India shifts to a new green economic model. The importance of this research goes beyond academics and has immediate implications for corporate leaders in management facing sustainability mandates, investors who want to have a sense of the performance of ESG-integrated portfolios, and regulators trying to improve the reporting in this area. Given that India is a party to UN Sustainable Development Goals & hopes to achieve net-zero emissions by 2070, it is important to inquire into costs and benefits of sustainability disclosure in framing policy and business strategy with a balanced approach. 2. Literature Review Several empirical studies have examined relationship between business financial performance & sustainability reporting in various temporal and geographic situations. The most exhaustive meta-analyses in this field reviewed more than 2,000 empirical examinations of the ESG-financial performance relationship and found 90% of studies found non-negative relations and positive relations in the majority (Friede et al. 2015). This fundamental work laid the theoretical groundwork for later studies in emerging markets. Companies listed on Bombay Stock Exchange with higher CSR scores demonstrated better financial performance (both accounting-based metrics), according to research by Bodhanwala and Bodhanwala (2018) on the relationship (positive or negative) between CSR activities & financial performance in Indian context. They co-authored study from 2012 to 2016. was the first evidence suggesting that sustainability activities in the unique regulatory and market setting of India lead to positive financial returns. Building on this framework, Rao, Dagar, Sohag, Dagher, and Tanin 2023 examined Nifty 50 companies from 2015 to 2022 using fixed-effects panel quantile regression analysis. They discovered that relationship between sustainability and financial performance varies across quantiles, suggesting that the relationship is not constant across all financial performance levels. Aspects of disclosure quality and its determinants have been investigated in recent studies specifically addressing BRSR implementation. Using hierarchical multiple regression to analyse BRSR disclosures of 130 companies in top 1,000 list of NSE, Kajal and Bansal (2025) reported that size of the firm measured by market capitalisation is a significant predictor of BRSR disclosure quality, while many traditional size determinants especially age, profitability and leverage were found to have no significant association with the quality of BRSR disclosures. Indicating that only sizable corporations are inclined to prioritize sustainability disclosures in full, even prompting questions about the quality of disclosures from smaller listed companies. The National Stock Exchange, CFA Institute, & CFA Society India (2024) jointly examined BRSR disclosures from 300 companies, which accounted for 70% of India's market capitalization. They found that problems with data quality continued to exist, including sectoral specificities, unclear data sources, and inconsistent units of measurement. Using panel data for all Indian-listed companies on Bombay Stock Exchange from FY 2016–17 to FY 2022–23, Goud (2025) investigated relationship between R&D spending and financial performance and ESG disclosure. The study used multiple regression, fixed effects models, and system GMM estimation techniques to find that overall ESG disclosure is significantly positively associated with ROE, ROA, and Tobin's Q. It also showed that corporate research and development (R&D) investment plays a mediating role in the relationship between corporate financial performance and ESG score, indicating that companies with sustainability initiatives perform better only when they pursue an innovation pathway of sustainability. There is a significant research gap because comparative studies examining the times before and after the BRSR's inception are still comparatively uncommon. Dash and Rout (2025) examined the effects of ESG factors on 37 Indian companies using dynamic panel data models from 2013 to 2022. They found that ESG scores had a significant negative impact on Tobin's Q and stock returns during their event period, with investors presumably being cautious due to the short-term costs associated with high ESG practices. However, ESG performance serves as a stabilizer in volatile market conditions, and stock return volatility is a key moderator (the study was able to determine this using the data obtained). The found esg-performance association would be better explained by that crucial time and market context. Some insights into the financial effects of sustainability reporting can be gained from international instances. Alshehhi, Nobanee, and Khare (2018) present evidence of three primary ways that sustainability practices generate value: (1) reputation enhancement; (2) operational efficiency; and (3) stakeholder trust, based on a worldwide review of the literature on sustainability practices and corporate financial performance. In particular, Qiu, Shaukat, and Tharyan (2016) investigated the social and environmental disclosures made by UK companies and discovered strong positive correlations with the financial performance of the company as measured by both market-based and accounting-based metrics. Sector-specific analysis demonstrate that the relationships between ESG and financial success vary significantly by sector. Compared to manufacturing sectors, the banking and financial services industry is more regulated and dependent on stakeholders, and it shows more positive connections between ESG and financial success (Agarwal et al., 2023) Technology companies operate inside their own ecosystems, which are limited by their small environmental footprint but significant social impacts. In the financial materiality game, social and governance issues are more important than environmental factors. The stakeholder theory, legitimacy theory, and resource-based view literatures serve as the theoretical foundations for these partnerships. Stakeholder theory (Freeman, 1984) contends that serving the interests of various stakeholders, which results in addressing social and environmental issues, eventually aids in the creation of long-term value and lessens societal conflict, thereby expanding social capital. According to legitimacy theory, businesses employ sustainability reporting to make sure their activities align with social norms. This helps them maintain their social license to operate and lowers their chance of facing sanctions from the government (Suchman, 1995). The resource base concept holds that sustainable practices can generate competitive advantages through improved staff morale, improved reputation, and inventive skills (Russo & Fouts 1997). There are still several gaps despite the large amount of research that has been done. There aren't many longitudinal studies evaluating the long-term effects of BRSR, especially as the majority of states just adopted the framework in the fiscal year 2022–2023. Second, additional mediating and moderating elements, like the regulatory environment, industry competitiveness, and corporate governance quality, require a more thorough investigation. Third, research ignores the importance of assurance and verification, which can improve financial performance by enhancing BRSR's reputation. Finally, contrasting mandated and voluntary reporters could shed light on whether the desire to report sustainably is driven by internal or external factors. 3. Objectives To examine the relationship between BRSR disclosure quality and financial performance indicators (ROA, ROE, NPM, EPS) among listed Indian firms during the period 2021-22 to 2023-24. To analyze sector-specific variations in the impact of BRSR implementation on financial performance across banking, information technology, manufacturing, and pharmaceutical industries. To assess whether BRSR adoption intensity correlates with improvements in market-based performance metrics and investor confidence indicators. 4. Methodology Background in Abstract Using a quantitative research design and panel data analysis, study seeks to illustrate relationship between BRSR & financial success across Indian listed companies. Under the assumption that financial performance measures & sustainability reporting quality are objectively measurable, study takes a positivist stance. The top 1,000 listed firms based on market capitalization on the National Stock Exchange & the Bombay Stock Exchange, as well as companies mandated by SEBI to submit BRSR reports, comprise the study population. Using purposive sampling, 150 businesses from four key industries banking and automated business management systems (BFSI), information technology (IT), manufacturing, and pharmaceuticals were chosen from among these various businesses. Continuous listing throughout the study period, the availability of complete BRSR reports for FY 2021–2022 through FY 2023–2024, and little or irrelevant merger or acquisition activities to obscure the financial comparison were the selection criteria. The data was gathered from multiple confirmed sources, with secondary sources serving as the primary source. Financial performance statistics, including ROA, ROE, NPM, and EPS, were gathered from the companies' audited annual reports, which are accessible on their websites and in the electronic databases of the NSE and BSE regulatory bodies. SEBI's official repository and company annual reports served as the sources for BRSR reports. The Bloomberg and Capital Line databases provided market-based performance metrics, such as changes in market capitalization and stock price fluctuations. We developed a comprehensive index to rate the BRSR disclosure quality factors based on quantum, fullness of reporting (completeness), and conformity to reporting guidelines using qualitative content analysis features. The following is an operationalization of the projected financial results that would be reflected by the three dependent variables as financial performance measures: Return on Equity divided by No Shareholder Equity {Profitability with respect to Shareholders, since only the latter are rewarded with dividends (the company's profit} {Net Profit Margin = Net Profit (Income)} divided by Total Revenues {operation wealth); and Earnings Per Share (EPS Equivalents): Net Income negative minus preferred dividends positive divided by weighted average shares outstanding. The ESG component scores for environmental, social, & governance separately; overall score on BRSR disclosure (out of 100) with various principle weights based on the completeness of the nine NGRBC principles; and whether BRSR is mandatory (the company adopts BRSR mandatorily in 2022-23) or voluntary (the company adopts BRSR voluntarily in 2021-22). Firm size, firm age (measured in years since incorporation), leverage (measured as ratio of total debt to total equity), and industrial sector classification (banking, IT, manufacturing, or pharmaceuticals) are all controlled for using logarithm of total assets. To ensure that the results were robust, statistical analyses were conducted using a variety of methodologies. We computed descriptive statistics (mean, median, standard deviation, and range) for each variable. Bivariate relationships between financial performance metrics and the caliber of BRSR disclosures were examined using correlation analysis. Techniques Fixed and fixed results Using a longitudinal data analysis, we used random effects models to account for unobserved heterogeneity among businesses. Additionally, we performed viability tests, examining temporal processes that would consistently skew positions in the way we predicted these outcomes to transpire (e.g. similar like financial return over time and less favorable market conditions for the appropriate decision). Hausman test: criteria for fixed versus random effects. We discovered several sector-specific tendencies after doing a sector-wise sub-group study. All analyses in Section I (4.51, 95%CI: 3.59–5.48) were conducted using the statistical tools STATA 17 and SPSS version 28 (IBM, Armonk, New York, USA), with hypothesis testing conducted at the 5% level. Diagnostic tests, such as tests for multicollinearity using variance inflation factors and tests for heteroskedasticity and autocorrelation using Durbin-Watson statistics and Breusch-Pagan tests, respectively, were used to establish the validity of the model. 5. Results An empirical study of 150 listed Indian companies over three fiscal years shed light on the causal relationship between financial success and BRSR implementation. Seven tables with statistical explanations present the results. Table 1 Descriptive Statistics of Financial Performance Indicators (N = 450 firm-years) Variable Mean Median Std. Deviation Minimum Maximum ROA (%) 8.42 7.85 6.23 -2.15 29.84 ROE (%) 14.67 13.92 9.87 -5.42 38.76 NPM (%) 12.85 11.43 8.96 1.23 42.35 EPS (₹) 48.52 42.18 36.74 -8.45 186.52 BRSR Score 68.34 70.00 15.42 32.00 95.00 Source: Compiled from NSE/BSE data and BRSR reports, FY 2021-22 to 2023-24 As in Table 1 , the descriptive statistics show that financial performance of the sampled companies is highly variable. The mean of 8.42% shows moderate efficiency at asset utilization with high standard deviation of 6.23, which shows notable heterogeneity. Despite fairly high mean figure of 14.67%, the good 5Y ROE of 14.67% shows fairly reasonable profitability from the shareholders side, even with ROE ranging from as low as -5.42% to as high as 38.76% indicating major differences in performance. In Cross Border eCommerce, the Net Profit Margin has been, on average, 12.85%, with high-performing merchants reaching over 40% margins. EPS, on the other hand, was more volatile with standard deviation of ₹36.74, indicating differences in profitability. Average BRSR disclosure score was 68.34, thus revealing that while disclosure quality was moderate-to-good for many companies, substantial improvement is needed by most companies, as shown by the maximum score of 95.00. A BRSR score of 15.42 Standard Deviation indicates that disclosure practices vary greatly among firms. Table 2 Sector-wise Average Financial Performance and BRSR Scores Sector ROA (%) ROE (%) NPM (%) EPS (₹) BRSR Score N Banking 1.42 12.85 24.36 52.84 72.45 112 Information Technology 18.67 21.43 18.92 68.35 78.23 118 Manufacturing 6.85 13.24 8.76 38.47 62.18 132 Pharmaceuticals 12.34 16.89 14.52 45.63 65.92 88 Source: Author's calculations based on company annual reports and BRSR disclosures As can be seen from Table 2 , there are considerable variations across sectors in terms of financial performance and the quality of BRSR disclosure. Due to the low capital intensity and high profit margins typical for knowledge-based industries, the IT sector showed the highest average overall performance on several metrics, with an average return on assets (ROA) of 18.67% & an average return on equity (ROE) of 21.43% Higher the score, more mature the reporting and tougher integration of ESG with operations, with IT companies attaining the best score of 78.23 in the BRSR, the report said. Despite relatively lower ROA of 1.42% on account of a high asset base, the banking sector demonstrated healthy NPM (24.36% NPM) and excellent BRSR scores at 72.45 owing to strict regulatory requirements. Next came manufacturing firms exhibiting moderate ROA of 6.85 (indicating moderate financial performance), but the lowest BRSR scores of 62.18, which may be linked to potentially higher environmental compliance challenges and less competitive positions in terms of availability of resources to invest in CSR. Pharmaceutical companies also showed a well-balanced performance with 12.34% ROA but moderate BRSR scores with an average of 65.92. The diversity in these sectors indicates that industry-specific analyses are needed to assess the impact of sustainability reporting. Table 3 Correlation Matrix between BRSR Scores and Financial Performance Indicators Variables ROA ROE NPM EPS BRSR Score ROA 1.000 ROE 0.724** 1.000 NPM 0.652** 0.583** 1.000 EPS 0.487** 0.612** 0.523** 1.000 BRSR Score 0.342** 0.186* 0.398** 0.275** 1.000 Note: ** Correlation significant at 0.01 level (2-tailed); * Correlation significant at 0.05 level (2-tailed) Correlation matrix showing relationships between financial performance indicators and BRSR disclosure scores is given in Table 3 . Financial performance metrics are necessarily positively correlated with each other, with ROA (return on asset) and ROE (return on equity) being most correlated pair (0.724) which is to be expected as companies using their assets efficiently also return better results to their shareholders. Onove et al., Journal of Financial Reporting and Accounting 13 5 Page 6 In a partial correlation analysis, BRSR gives a statistically significant positive correlation with each of the financial performances indicators, most strongly with NPM (r = 0.398, p < 0.01) followed by ROA (r = 0.342, p < 0.01). association with ROE is positive as well, but weaker (r = 0.186, p < 0.05), which indicates that the quality of sustainability reporting is more strongly related to operational efficiency and profitability than to equity returns in India. Although not causal, such positive correlations are certainly suggestive of the hypothesis that BRSR implementation correlates positively with financial performance and needs to be ascertained further through regression analyses. The correlations moderately strong (none of them above 0.40) indicate BRSR scores did explain a fraction of financial performance variability but that other factors were also playing a significant role. Table 4 Panel Regression Analysis - BRSR Impact on ROA Independent Variables Coefficient Std. Error t-statistic p-value BRSR Score 0.087 0.032 2.719 0.007** Firm Size (Log Assets) 1.245 0.428 2.908 0.004** Firm Age 0.015 0.018 0.833 0.405 Leverage Ratio -0.042 0.016 -2.625 0.009** IT Sector Dummy 4.523 1.187 3.810 0.000** Constant -8.342 2.456 -3.397 0.001** R-squared 0.387 F-statistic 56.82 0.000 Note: ** Significant at 1% level; Dependent Variable: ROA Table 4 : Regression results investigating the impact of BRSR on Return on Assets coefficient for BRSR Score is 0.087 & statistically significant (p = 0.007), meaning that other factors controlled, with a unit increase in the quality of BRSR disclosure, ROA increases by 0.087 percent. A positive relationship here, in support of the hypothesis and in line with the literature, suggests that gaining operational efficiencies goes hand in hand with wide-ranging sustainability reporting. Firm size has a significant positive impact (coefficient = 1.245, p = 0.004) implying economies of scale and resource advantages to generating both higher ROA and quality reporting. Variable Leverage ratio negatively influences the ROA (coefficient = − 0.042, p = 0.009), in line with the expectations from financial theory that high levels of debt burdens firms profitability. The IT sector dummy variable exhibits a large positive coefficient at 4.523 (p < 0.001), providing strong evidence for more efficient asset productivity by technology firms. With an R-squared of 0.387, included variables account for about 38.7 percent of variation in ROA, thus justification additional reasonable explanation of power, result could be affected by other unrecorded factors. The global model fit is statistically validated by the highly sig. F-statistic. Table 5 Panel Regression Analysis - BRSR Impact on ROE Independent Variables Coefficient Std. Error t-statistic p-value BRSR Score 0.043 0.045 0.956 0.340 Firm Size (Log Assets) 0.874 0.562 1.555 0.121 Firm Age -0.028 0.024 -1.167 0.244 Leverage Ratio 0.156 0.021 7.429 0.000** Banking Sector Dummy -2.345 1.423 -1.648 0.100 Constant 5.672 3.124 1.816 0.070 R-squared 0.328 F-statistic 44.19 0.000 Note: ** Significant at 1% level; Dependent Variable: ROE Regression results where Returnon Equity is dependent variable are shown in Table 5 . In particularly BRSR Score coefficient is positive (0.043) and not statically significant (p = 0.340), indicating that BRSR disclosure quality has no statistically significant association with ROE in the aggregate sample. It is consistent with recent studies of relationship between ESG activities and equity returns for emerging markets showing conflicting results, some reporting no relationship [19, 19, 20] and some finding a positive [21] or a negative [22, 23, 24] relationship. Ryan:' Here, perhaps not surprisingly, leverage ratio is the leading predictor, significant with strong positive coefficient of 0.156 (p < 0.001), which captures the amplification effect of financial leverage on equity returns when firms invest in future projects with positive net present value.' Although only marginally insignificant (p = 0.100), the banking dummy also displays a negative coefficient (-2.345), suggesting that banks may have a higher equity base which then leads to dilution in the measured ROE. This model has moderate explanatory power with the overall R-squared of 32.8%(33.28, model) showing the portion of ROE changes explained by other variables including in model. The inconsequential BRSR–ROE association indicates that the advantages of sustainability reporting may be realized through operational enhancements rather than direct equity return augmentations, at least for the near-term covered in this analysis. Table 6 Panel Regression Analysis - BRSR Impact on Net Profit Margin Independent Variables Coefficient Std. Error t-statistic p-value BRSR Score 0.124 0.038 3.263 0.001** Firm Size (Log Assets) 0.687 0.491 1.399 0.163 Firm Age 0.042 0.021 2.000 0.046* Leverage Ratio -0.067 0.018 -3.722 0.000** Pharma Sector Dummy 3.124 1.289 2.424 0.016* Constant -2.456 2.867 -0.857 0.392 R-squared 0.412 F-statistic 62.47 0.000 Note: ** Significant at 1% level; * Significant at 5% level; Dependent Variable: NPM BRSR has a positive and significant effect on Net Profit Margin, which can be seen in Table 6 . This relationship is one of the strongest evidence we will find out of this study as a 0.124 (p = 0.001) coefficient indicates that for every 1 unit improvement in BRSR score, the NPM increases by 0.124 percentage point. This result implies that, at least in the case of the firms which did report, comprehensive sustainability reporting is associated with improved profitability, perhaps through operational efficiencies, cost savings and higher sales to sustainability-conscious consumers. Firm age has a slight positive effect (coefficient = 0.042, p = 0.046), showing that older firms with superior processes enjoy better margins. The leverage ratio again has large and significant negative impact (coefficient=-0.067, p < 0.001), consistent with debt servicing costs reducing profitability. This industry characteristic of patent-protected profits translates into an above normal industry profit noticeably reflected in the significant positive coefficient of 3.124 (p = 0.016) for the pharmaceutical sector dummy Our model with control variables (highest R-squared of 0.412 among specifications examined) shows that both BRSR quality and control variables jointly explain variation in NPM. Our findings provide robust empirical evidence of the benefits of integrated sustainability disclosure. Table 7 Year-wise Trend Analysis of BRSR Adoption and Financial Performance Fiscal Year Companies Reporting BRSR Avg BRSR Score Avg ROA (%) Avg ROE (%) Avg NPM (%) 2021-22 45 (30%) 58.32 7.86 13.92 11.45 2022-23 150 (100%) 68.45 8.52 14.78 12.98 2023-24 150 (100%) 74.25 8.88 15.31 13.92 Growth Rate - 27.3% 13.0% 10.0% 21.6% Source: Longitudinal analysis of sample companies' BRSR reports and financial statements Temporal trends shown in Table 7 suggest that the quality of BRSR disclosure as well as the financial performance continue to improve over the period of the study. Participating under voluntary BRSR route, documented only 30% of sampled companies with average score of 58.32, which demonstrates initial hiccups in implementation during 2021-22. The compulsory adoption in 2022-23 led to universal coverage, with average scores improving to 68.45, a 17.4% increase highlighting both learning by doing effects and better reporting infrastructure. The improve led to the averages attaining a 74.25 by 2023–24, a 27.3% improvement in three years. At the same time, financial performance metrics continued to trend upwards. An improvement of 13.0% (from 7.86% to 8.88%), indicates firms did better with regards to using high quality resources; suggesting improved efficiency, perhaps driven by sustainability initiatives. Over the same time frame, ROE increased 10.0% from 13.92% to 15.31% and NPM had the highest growth of 21.6%, from 11.45% to 13.92%. The progress on these fronts concomitantly argues for the hypothesis that BRSR adoption is coupled with an improvement in financial performance, although it is impossible to establish strict causality due to confounders operating in the form of economic boom, market condition and individual firms' progress. These data hint at a maturation process wherein companies first flail against the requirements of disclosure, only to move on to deeper integration of sustainability into core operations, and ultimately to reap the benefits in the form of improved sustainability reporting and better performance. 7. Discussion Our empirical findings advance the emerging literature on financial implications of sustainability reporting in emerging markets by adding context-specific insights about India's unique BRSR initiative as a mandatory framework. The findings, which show the mixed results of BRSR implementation, reinforce and challenge existing understanding by revealing sector-specific and metric-dependent BRSR-financial performance relationships and linking their outcomes to sustainability reporting strategic propositions with significant caveats. In line with propositions of the stakeholder theory, positive & significant association between BRSR disclosure quality & ROA reflects that reporting on the varied stakeholder interests creates operational efficiencies and competitive advantages to the firms, which in turn leads to the enhancement in the financial performance of the firms. It is more likely that companies with higher BRSR scores have taken systematic steps towards ESG management whether it be in energy efficiency, waste reduction or employee welfare and this will either directly lower costs or reduce their propensity to create supply chain shocks through litigation. This result is consistent with that of Rao et al. As per the conclusion of Beal et al. (2023), ESG practices affect the profitability in various ways, while their study reported different effects along the ROE distribution quantiles in the Nifty 50 companies. Although BRSR-ROE relationship was expected to be significant, reported un-significant has plausible interpretation, especially from the capital structure characteristic of firm and behavioral pattern of investors in India. Dash and Rout (2025) reports similar negatives of ESG-Tobin's Q relationships, which they suggest occur as a result of pressure on investors due to potential short-term costs of sustainability investments. benefits of sustainability initiatives can take years to trickle through into shareholder value, so the three-year study period could have been too short to identify a lasting improvement in ROE. The high proportion of retail investors in India and the generally short-term focus on price movements and dividend yields being the drivers for equity markets, ESG was not found to be relevant over the long term – a finding that might lend weight to this alleged 'disconnect' between BRSR quality and epuivty returns. Particularly interesting is the high positive association between BRSR scores and Net Profit Margin, suggesting that perhaps formal (comprehensive) sustainability report is the most strongly related to bottom line performance. However, this relationship could be realized through a myriad of pathways: premium pricing of product produced sustainably; avoided costs from efficient use of resources; avoided or lower-potential compliance costs with regulations at multiple levels (local, national and international) through proactively managing ESG issues; as well as higher brand valuations attracting quality-conscious customers. Consistent with investments in R&D as a mediating variable, Goud (2025) also finds comparable positive relationships between measures of ESG disclosure and profitability, wherein the concentration on R&D seems especially important as their new interpretive explanation is that innovative firms are more efficient or effective at creating value with respect to sustainability initiatives. This paper emphasizes the importance to take kind of context into account as sector-specific differences were suggested by the ESG-performance relationship proposed in this study. Lower BRSR scores are statistically significant at every level of investment where the IT firms score worse than all other industries or worse compared to certain sectors i.e. more environmental efficiencies offered by the IT sector, highly skilled independent thought skills base here they place value on corporate responsibility and investors prefer governance and social particularly when the IT firms have efficient processes in place. Looking at the banking sector, effects on compliance with disclosures as well as second order rammificatons about ROE due to capital availability are revealed. The fact that the BRSR scores of manufacturing firms tend to be lower and their financial performance moderate may reflect several negative effects ( 1 ) Compliance costs are typically proportionately higher for companies in high-carbon industries, gradually retarding investment rates; ( 2 ) complement with legacy systems and operational processes have not made inclusion of sustainability information into collaborating with teams' actions and business models just miserable. Patterns of sectors are similar as with Agarwal et al. Corroboration of the results of material variation in ESG-performance relationship across sectors in India by Ghosh et al. Temporality The fact that both T4 BRSR score and financial performances improve over a 3 year period suggest that the two are actually positively related (causation still unclear). Several alternative explanations merit consideration. It’s one of a couple of things: The economy has rebounded post-COVID-19, possibly increasing firm profits which in turn would be associated with more coverage of sustainability. I) This does not then allow to dismiss the reverse causality effect (that of wealthier firms investing in compliance with BRSR), also consistent with Kajal and Bansal finding evidence of causal link between firm size (a proxy for acquisition complementary resources) on disclosure quality. Lastly, the positive correlation may be due omitted variables such as quality of management or corporate culture that facilitate achieving both sustainability as well financial performance. The findings of this study are relevant to various entities. BRSR is not something that corporate executives can merely check off the box – it should be seen as a strategic value-creation opportunity to enhance operational efficiency, relationships with stakeholders and long term value creation. Thus prioritising exposure quality (in particular in terms of the former's dimension on quantitative KPIs and assurance), appears to be justifiable given performance-related relationships. Investors should incorporate high quality BRSR work into their valuation models, due to the fundamental immunity & resilient of better ESG-integrated companies (though of course short-term equity returns will not necessarily reflect such benefit). The second is the request for more attention to sector specific implementation support, particularly (in the case of manufacturing) smaller firms struggling with disclosure requirements; all combined however with retaining and/or strengthening of the now mandatory nature of reporting so that we do not slip back into voluntary framework limitations. The study also pinpoint several relevant items for policy. More than four years after its first report on the topic, NSE, CFA Institute & CFA Society India (2024) still point to problems with data quality - mis-reported units of measure, sources of data and incomplete disclosure. Further, SEBI could also look at prescribing atleast standardised templates (e.g., for capturing quantitative metrics) for BRSR Core indicators as well, and explore the inclusion of third-party assurance for those indicators to strengthen them. Efforts to level the playing field in the quality of disclosure could be made through capacity building programmes targeted at smaller firms and traditional sectors. Furthermore, incorporating BRSR data into credit rating assessments and can pave way for real ESG integration (not box ticking) in investment mandates. Contribution to Knowledge Theoretically, this research contributes by empirically validating stakeholder theory in the emerging economy context of India where sustainability reporting adds value by aligning corporate activities across a range of interests of multiple stakeholders. Notably, are associated with contrasting effects under different performance metrics, which provide support to contingency theory that ESG–performance relationships vary with contexts including industry conditions, institutional settings and level of market development. Our evidence that ratios have significant and substantive effects on all performance measures and mediate BRSR effects so material cannot be dismissed out of hand suggest that financial structure needs to be factored into ESG strategy formation. The constraints of the present study have provided us with an angle for further exploration. And while the three years happens to be the first phase of implementation for BRSR, three years is still too short a time frame to judge long-term impacts particularly regarding equity returns and market valuations. Firms that have been followed for five or ten years would be useful in sorting out whether patterns that are developing persist, intensify or reverse. The focus on listed companies is one of the major limitations in terms of generalizability to India Inc. which consists of a large number of SMEs. Research on companies that report BRSR as a voluntary act (rather than an obligatory reporting requirement) may provide insight into the relative importance of intrinsic versus extrinsic motivations driving firms to report their sustainable performance. Additional qualitative studying examining management viewpoints, hurdles in implementation and the process of strategic integration of BRSR in organizations could complement the quantitative results and together result to an enhanced measurement of BSR across organizations. 8. Conclusion The BRSR-Financial performance relationship of the 150 listed Indian firms is a hot topic for academic and corporate debate from the fiscal year 2021-22 to 2023-24 and this study provides some empirical evidence about these debates of the ESG firms' financial performance relationship of an emerging market like India. The results exhibit intricate, nuanced relationships as BRSR disclosure quality shows significant positive associations with operational efficiency measures (ROA) and profitability variables (NPM) but neutral associations with equity returns (ROE). In sector-specific assessments, we found considerable heterogeneity, with positive correlations being particularly strong for information technology and banking, and weaker ones for the manufacturing and pharmaceutical sectors. The positive BRSR-ROA and BRSR-NPM links substantiate stakeholder theory propositions that extensive sustainability reporting offers value via operational efficiencies, cost savings, and increased trust of stakeholders. Corporations having better BRSR scores seem to be able to manage ESG in a more systematic manner and this is reflected in their superior performance. Nonetheless, the insignificance of BRSR-ROE relationship indicates that sustainability efforts are unlikely to be rewarded by the equity market participants in the short-run, which may happen due to investors view paper as short-run costs incurred without an understanding of long-run value creation mechanisms. Conclusion Temporal trends indicated similar upward movement in BRSR disclosure quality alongside financial performance, as BRSR scores increased by an average of 27.3% while the ROA, ROE and NPM grew by 13.0%, 10.0%, and 21.6%, respectively, during the study period. Although this is observational data with a short time span, so causality is limited, these trends imply positive associations. However, these potential confounders (reverse causality, omitted variable bias, other concurrent economic developments) last merit consideration. This work has real-world implications for managers, investors, and policymakers. Far from being a regulatory compliance check, BRSR is an opportunity for executives to invest in stronger ESG management systems including transparency through ESG disclosure and communication. Based on the above, investors should include BRSR as an input into their valuation frameworks, as firms with better quality sustainability integration may show better fundamentals and long-term resilience. Policymakers must keep continuing the improvement of the reporting frameworks; ensure the efforts in data quality; offer the sectoral implementation assistance; and incentivize true ESG risk integration via credit ratings and investment guidelines. Future research could include longitudinal studies that assess long-term effects of BRSR across spans of time, qualitative work that explores implementation issues and management perceptions, between few voluntary and mandatory reporters and between those that also investigate mediating variables like the quality of corporate governance, the level of R&D investment and the variety of stakeholder engagement mechanisms utilized. With time, as the sustainability reporting ecosystem in India matures, and time-series data becomes available, conclusive insights on causation and longer-term effects will come about. This study not only add in to the limited empirical literature related to financial and market impact of MDR on sustainability reporting from unique regulatory and market context of India but also aids corporate leaders, investors and policy makers to take informed decision to face the challenges of transition to sustainable business practice. References Agarwal B, Gautam RS, Jain P, Rastogi S, Bhimavarapu VM, Singh S (2023) Impact of environmental, social, and governance activities on the financial performance of Indian health care sector firms: Using competition as a moderator. J Sustainable Finance Invest 13(1):125–148 Alshehhi A, Nobanee H, Khare N (2018) The impact of sustainability practices on corporate financial performance: Literature trends and future research potential. Sustainability 10(2):494 Bodhanwala S, Bodhanwala R (2018) Does corporate sustainability impact firm profitability? Evidence from India. Manag Decis 56(8):1734–1747 Dash AK, Rout HS (2025) Unpacking the ESG–financial performance nexus: The moderating effect of volatility on Indian companies. Bus Soc Rev 130(1):45–72 Freeman RE (1984) Strategic management: A stakeholder approach. Pitman Publishing, Boston Friede G, Busch T, Bassen A (2015) ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. J Sustainable Finance Invest 5(4):210–233 Goud NN (2025) Corporate sustainability performance vis-à-vis ESG disclosure and R&D: Does it matter to influence corporate performance—Evidence from India. Vision: J Bus Perspective 29(1):112–128 Kajal A, Bansal S (2025) Analysing impact of corporate attributes on sustainability disclosures through India's new BRSR framework. Int J Law Manage 67(2):185–203 NSE, Institute CFA, CFA Society India (2024) The current state of BRSR at corporate India: Sustainability disclosures improving, but data quality issues persist. National Stock Exchange, Mumbai Qiu Y, Shaukat A, Tharyan R (2016) Environmental and social disclosures: Link with corporate financial performance. Br Acc Rev 48(1):102–116 Rao A, Dagar V, Sohag K, Dagher L, Tanin TI (2023) Good for the planet, good for the wallet: The ESG impact on financial performance in India. Finance Res Lett 56:104093 Russo MV, Fouts PA (1997) A resource-based perspective on corporate environmental performance and profitability. Acad Manag J 40(3):534–559 Securities and Exchange Board of India (2021) Business responsibility and sustainability reporting by listed entities (Circular No. SEBI/HO/CFD/CMD- 2/P/CIR/2021/562 ). Mumbai: SEBI Suchman MC (1995) Managing legitimacy: Strategic and institutional approaches. Acad Manage Rev 20(3):571–610 Tripathi V, Kaur A (2020) Socially responsible investing: Performance evaluation of BRICS nations. J Adv Manage Res 17(4):525–547 Whelan T, Atz U, Van Holt T, Clark C (2021) ESG and financial performance: Uncovering the relationship by aggregating evidence from 1,000 plus studies published between 2015–2020. NYU Stern Center for Sustainable Business Aras G, Tezcan N, Furtuna OK (2018) The value relevance of banking sector multidimensional corporate sustainability performance. Corp Soc Responsib Environ Manag 25(6):1062–1073 Bodhanwala S, Bodhanwala R (2019) Do investors gain from sustainable investing? An empirical evidence from India. Int J Bus Excellence 19(1):100–118 Broadstock DC, Chan K, Cheng LTW, Wang X (2021) The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China. Finance Res Lett 38:101716 Eccles RG, Ioannou I, Serafeim G (2014) The impact of corporate sustainability on organizational processes and performance. Manage Sci 60(11):2835–2857 Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8917099","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":593869494,"identity":"8fbc97ae-ce40-4466-8e9f-85415424adaf","order_by":0,"name":"Dr. Deepak S. Sharma","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABIklEQVRIiWNgGAWjYDCCAwwMEiBagoeBDSLC3gAkDCxI0cJzAKRFghQtEglgEqcOvtsHGG98qLgjL9lz/NmDn3u2yfPPfH51w48CCQb+9u4EbFokzyUwW84488xwNm+PuWHPs9uGM27nlN3sATpM4szZDdi0GJxhYJPmbTvMOI+fh02C58BtxobbOWk3eIBaDCRycWv5+++w/Tx+9meSfw7ctp9/80zazT+EtDA2HE6czdtgJg20JXHDDfZjt/HZInmGsdmy59iz5Jk9Z8ykZQ7cTt54JofttoyBBA8uv/CdYT5440fNHdsZZ9KfSb45cNt23vHjz26++WMjx9/ei1ULAwNjAwM4dhCAxwBMYlcOByha2B8QUD0KRsEoGAUjDAAAJhZsbDGvfpsAAAAASUVORK5CYII=","orcid":"https://orcid.org/0000-0003-0121-0440","institution":"Datta Meghe Institute of Higher Education \u0026 Research","correspondingAuthor":true,"prefix":"Dr.","firstName":"Deepak","middleName":"S.","lastName":"Sharma","suffix":""},{"id":593869495,"identity":"bfe2c210-be84-48df-b2e8-e8d1eedd66a6","order_by":1,"name":"Dr. Pankajkumar Anawade","email":"","orcid":"https://orcid.org/0000-0003-1613-2051","institution":"Datta Meghe Institute of Higher Education \u0026 Research","correspondingAuthor":false,"prefix":"Dr.","firstName":"Pankajkumar","middleName":"","lastName":"Anawade","suffix":""}],"badges":[],"createdAt":"2026-02-19 11:30:27","currentVersionCode":1,"declarations":{"humanSubjects":false,"vertebrateSubjects":true,"conflictsOfInterestStatement":false,"humanSubjectEthicalGuidelines":false,"humanSubjectConsent":false,"humanSubjectClinicalTrial":false,"humanSubjectCaseReport":false,"vertebrateSubjectEthicalGuidelines":true},"doi":"10.21203/rs.3.rs-8917099/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8917099/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[],"financialInterests":"The authors declare no competing interests.","formattedTitle":"\u003cp\u003e\u003cstrong\u003eCorporate sustainability reporting under BRSR: Impact on financial performance of listed Indian Firms\u003c/strong\u003e\u003c/p\u003e","fulltext":[{"header":"1. Introduction","content":"\u003cp\u003eThe paradigm of new-age corporate governance, which has transformed business operations in India, was brought about by the shift towards environmental, social, \u0026amp; governance (ESG). To put it another way, Business Responsibility \u0026amp; Sustainability Reporting framework, which was established by SEBI in May 2021, is the largest effort in India to date to standardize sustainability disclosures for Indian listed companies (Kajal \u0026amp; Bansal, 2025). Content Based on Communication Transparency The Business Responsibility \u0026amp; Sustainability Report (BRSR) framework mandates that top 1,000 listed companies by market capitalization provide a quantitative disclosure of their ESG performance. This is significant departure from previous voluntary Business Responsibility Report (Rao et al, 2023). BRSR adheres to the global framework for sustainability reporting, which includes Task Force on Climate Related Financial Disclosures, Sustainability Accounting Standards Board, \u0026amp; Global Reporting Initiative. By integrating Indian firms into the global sustainability ecosystem, this alignment helps them develop a competitive edge and facilitate cross-border investments (Goud, 2025). The framework's nine tenets business ethics, product life cycle, stakeholder involvement, and human rights protection are based on National Guidelines on Responsible Business Conduct.\u003c/p\u003e\n\u003cp\u003eSustainability reporting has been a subject of wide-ranging academic discussion all over the world, partly due to the inconsistent findings of empirical research into the sustainability reporting-financial performance connection across geographical, industrial and methodological contexts (Fried et al., 2015). Recent studies find positive ESFiG correlation in developed markets, but the story in emerging markets is more complex as there are different challenges as compared to the developed ones. The Indian scenario is also interesting since the country has mandatory CSR provisions in place since 2014 and has recently rolled out mandatory sustainability reporting (Tripathi \u0026amp; Kaur, 2020). There is empirical evidence from Indian markets that sustainability efforts impact corporate financial performance through several channels such as improved reputation, lower operational costs, better access to capital and reduction in regulatory risks (Bodhanwala \u0026amp; Bodhanwala, 2018). On the other hand, the immediate expenses of adopting strong ESG structures monitoring systems, reporting infrastructure, and compliance mechanisms — can also do damage to profitability measures in the short run. Corporate leaders, investors and policymakers will have to be cognisant of these dynamics as India shifts to a new green economic model. The importance of this research goes beyond academics and has immediate implications for corporate leaders in management facing sustainability mandates, investors who want to have a sense of the performance of ESG-integrated portfolios, and regulators trying to improve the reporting in this area. Given that India is a party to UN Sustainable Development Goals \u0026amp; hopes to achieve net-zero emissions by 2070, it is important to inquire into costs and benefits of sustainability disclosure in framing policy and business strategy with a balanced approach.\u003c/p\u003e"},{"header":"2.\tLiterature Review","content":"\u003cp\u003eSeveral empirical studies have examined relationship between business financial performance \u0026amp; sustainability reporting in various temporal and geographic situations. The most exhaustive meta-analyses in this field reviewed more than 2,000 empirical examinations of the ESG-financial performance relationship and found 90% of studies found non-negative relations and positive relations in the majority (Friede et al. 2015). This fundamental work laid the theoretical groundwork for later studies in emerging markets. Companies listed on Bombay Stock Exchange with higher CSR scores demonstrated better financial performance (both accounting-based metrics), according to research by Bodhanwala and Bodhanwala (2018) on the relationship (positive or negative) between CSR activities \u0026amp; financial performance in Indian context. They co-authored study from 2012 to 2016. was the first evidence suggesting that sustainability activities in the unique regulatory and market setting of India lead to positive financial returns. Building on this framework, Rao, Dagar, Sohag, Dagher, and Tanin 2023 examined Nifty 50 companies from 2015 to 2022 using fixed-effects panel quantile regression analysis. They discovered that relationship between sustainability and financial performance varies across quantiles, suggesting that the relationship is not constant across all financial performance levels.\u003c/p\u003e\n\u003cp\u003eAspects of disclosure quality and its determinants have been investigated in recent studies specifically addressing BRSR implementation. Using hierarchical multiple regression to analyse BRSR disclosures of 130 companies in top 1,000 list of NSE, Kajal and Bansal (2025) reported that size of the firm measured by market capitalisation is a significant predictor of BRSR disclosure quality, while many traditional size determinants especially age, profitability and leverage were found to have no significant association with the quality of BRSR disclosures. Indicating that only sizable corporations are inclined to prioritize sustainability disclosures in full, even prompting questions about the quality of disclosures from smaller listed companies. The National Stock Exchange, CFA Institute, \u0026amp; CFA Society India (2024) jointly examined BRSR disclosures from 300 companies, which accounted for 70% of India's market capitalization. They found that problems with data quality continued to exist, including sectoral specificities, unclear data sources, and inconsistent units of measurement. Using panel data for all Indian-listed companies on Bombay Stock Exchange from FY 2016–17 to FY 2022–23, Goud (2025) investigated relationship between R\u0026amp;D spending and financial performance and ESG disclosure. The study used multiple regression, fixed effects models, and system GMM estimation techniques to find that overall ESG disclosure is significantly positively associated with ROE, ROA, and Tobin's Q. It also showed that corporate research and development (R\u0026amp;D) investment plays a mediating role in the relationship between corporate financial performance and ESG score, indicating that companies with sustainability initiatives perform better only when they pursue an innovation pathway of sustainability.\u003c/p\u003e\n\u003cp\u003eThere is a significant research gap because comparative studies examining the times before and after the BRSR's inception are still comparatively uncommon. Dash and Rout (2025) examined the effects of ESG factors on 37 Indian companies using dynamic panel data models from 2013 to 2022. They found that ESG scores had a significant negative impact on Tobin's Q and stock returns during their event period, with investors presumably being cautious due to the short-term costs associated with high ESG practices. However, ESG performance serves as a stabilizer in volatile market conditions, and stock return volatility is a key moderator (the study was able to determine this using the data obtained). The found esg-performance association would be better explained by that crucial time and market context. Some insights into the financial effects of sustainability reporting can be gained from international instances. Alshehhi, Nobanee, and Khare (2018) present evidence of three primary ways that sustainability practices generate value: (1) reputation enhancement; (2) operational efficiency; and (3) stakeholder trust, based on a worldwide review of the literature on sustainability practices and corporate financial performance. In particular, Qiu, Shaukat, and Tharyan (2016) investigated the social and environmental disclosures made by UK companies and discovered strong positive correlations with the financial performance of the company as measured by both market-based and accounting-based metrics.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eSector-specific analysis demonstrate that the relationships between ESG and financial success vary significantly by sector. Compared to manufacturing sectors, the banking and financial services industry is more regulated and dependent on stakeholders, and it shows more positive connections between ESG and financial success (Agarwal et al., 2023) Technology companies operate inside their own ecosystems, which are limited by their small environmental footprint but significant social impacts. In the financial materiality game, social and governance issues are more important than environmental factors. The stakeholder theory, legitimacy theory, and resource-based view literatures serve as the theoretical foundations for these partnerships. Stakeholder theory (Freeman, 1984) contends that serving the interests of various stakeholders, which results in addressing social and environmental issues, eventually aids in the creation of long-term value and lessens societal conflict, thereby expanding social capital. According to legitimacy theory, businesses employ sustainability reporting to make sure their activities align with social norms. This helps them maintain their social license to operate and lowers their chance of facing sanctions from the government (Suchman, 1995). The resource base concept holds that sustainable practices can generate competitive advantages through improved staff morale, improved reputation, and inventive skills (Russo \u0026amp; Fouts 1997). There are still several gaps despite the large amount of research that has been done. There aren't many longitudinal studies evaluating the long-term effects of BRSR, especially as the majority of states just adopted the framework in the fiscal year 2022–2023. Second, additional mediating and moderating elements, like the regulatory environment, industry competitiveness, and corporate governance quality, require a more thorough investigation. Third, research ignores the importance of assurance and verification, which can improve financial performance by enhancing BRSR's reputation. Finally, contrasting mandated and voluntary reporters could shed light on whether the desire to report sustainably is driven by internal or external factors.\u003c/p\u003e"},{"header":"3.\tObjectives","content":"\u003col\u003e\n \u003cli\u003eTo examine the relationship between BRSR disclosure quality and financial performance indicators (ROA, ROE, NPM, EPS) among listed Indian firms during the period 2021-22 to 2023-24.\u003c/li\u003e\n \u003cli\u003eTo analyze sector-specific variations in the impact of BRSR implementation on financial performance across banking, information technology, manufacturing, and pharmaceutical industries.\u003c/li\u003e\n \u003cli\u003eTo assess whether BRSR adoption intensity correlates with improvements in market-based performance metrics and investor confidence indicators.\u003c/li\u003e\n\u003c/ol\u003e"},{"header":"4. Methodology","content":"\u003cp\u003eBackground in Abstract Using a quantitative research design and panel data analysis, study seeks to illustrate relationship between BRSR \u0026amp; financial success across Indian listed companies. Under the assumption that financial performance measures \u0026amp; sustainability reporting quality are objectively measurable, study takes a positivist stance. The top 1,000 listed firms based on market capitalization on the National Stock Exchange \u0026amp; the Bombay Stock Exchange, as well as companies mandated by SEBI to submit BRSR reports, comprise the study population. Using purposive sampling, 150 businesses from four key industries banking and automated business management systems (BFSI), information technology (IT), manufacturing, and pharmaceuticals were chosen from among these various businesses. Continuous listing throughout the study period, the availability of complete BRSR reports for FY 2021–2022 through FY 2023–2024, and little or irrelevant merger or acquisition activities to obscure the financial comparison were the selection criteria. The data was gathered from multiple confirmed sources, with secondary sources serving as the primary source. Financial performance statistics, including ROA, ROE, NPM, and EPS, were gathered from the companies' audited annual reports, which are accessible on their websites and in the electronic databases of the NSE and BSE regulatory bodies. SEBI's official repository and company annual reports served as the sources for BRSR reports. The Bloomberg and Capital Line databases provided market-based performance metrics, such as changes in market capitalization and stock price fluctuations. We developed a comprehensive index to rate the BRSR disclosure quality factors based on quantum, fullness of reporting (completeness), and conformity to reporting guidelines using qualitative content analysis features. The following is an operationalization of the projected financial results that would be reflected by the three dependent variables as financial performance measures: Return on Equity divided by No Shareholder Equity {Profitability with respect to Shareholders, since only the latter are rewarded with dividends (the company's profit} {Net Profit Margin = Net Profit (Income)} divided by Total Revenues {operation wealth); and Earnings Per Share (EPS Equivalents): Net Income negative minus preferred dividends positive divided by weighted average shares outstanding. The ESG component scores for environmental, social, \u0026amp; governance separately; overall score on BRSR disclosure (out of 100) with various principle weights based on the completeness of the nine NGRBC principles; and whether BRSR is mandatory (the company adopts BRSR mandatorily in 2022-23) or voluntary (the company adopts BRSR voluntarily in 2021-22). Firm size, firm age (measured in years since incorporation), leverage (measured as ratio of total debt to total equity), and industrial sector classification (banking, IT, manufacturing, or pharmaceuticals) are all controlled for using logarithm of total assets. To ensure that the results were robust, statistical analyses were conducted using a variety of methodologies. We computed descriptive statistics (mean, median, standard deviation, and range) for each variable. Bivariate relationships between financial performance metrics and the caliber of BRSR disclosures were examined using correlation analysis. Techniques Fixed and fixed results Using a longitudinal data analysis, we used random effects models to account for unobserved heterogeneity among businesses. Additionally, we performed viability tests, examining temporal processes that would consistently skew positions in the way we predicted these outcomes to transpire (e.g. similar like financial return over time and less favorable market conditions for the appropriate decision). Hausman test: criteria for fixed versus random effects. We discovered several sector-specific tendencies after doing a sector-wise sub-group study. All analyses in Section I (4.51, 95%CI: 3.59–5.48) were conducted using the statistical tools STATA 17 and SPSS version 28 (IBM, Armonk, New York, USA), with hypothesis testing conducted at the 5% level. Diagnostic tests, such as tests for multicollinearity using variance inflation factors and tests for heteroskedasticity and autocorrelation using Durbin-Watson statistics and Breusch-Pagan tests, respectively, were used to establish the validity of the model.\u003c/p\u003e"},{"header":"5. Results","content":"\u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eAn empirical study of 150 listed Indian companies over three fiscal years shed light on the causal relationship between financial success and BRSR implementation. Seven tables with statistical explanations present the results.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eDescriptive Statistics of Financial Performance Indicators (N\u0026thinsp;=\u0026thinsp;450 firm-years)\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eVariable\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eMean\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMedian\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eStd. Deviation\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eMinimum\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eMaximum\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eROA (%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e8.42\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e7.85\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e6.23\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e-2.15\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e29.84\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eROE (%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e14.67\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e13.92\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e9.87\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e-5.42\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e38.76\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eNPM (%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e12.85\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e11.43\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e8.96\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e1.23\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e42.35\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEPS (₹)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e48.52\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e42.18\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e36.74\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e-8.45\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e186.52\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e68.34\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e70.00\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e15.42\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e32.00\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e95.00\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"6\"\u003e\u003cem\u003eSource: Compiled from NSE/BSE data and BRSR reports, FY 2021-22 to 2023-24\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eAs in Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e, the descriptive statistics show that financial\u0026ensp;performance of the sampled companies is highly variable. The mean of 8.42% shows\u0026ensp;moderate efficiency at asset utilization with high standard deviation of 6.23, which shows notable heterogeneity. Despite fairly high mean figure of 14.67%, the good 5Y ROE of 14.67% shows fairly\u0026ensp;reasonable profitability from the shareholders side, even with ROE ranging from as low as -5.42% to as high as 38.76% indicating major differences in performance. In Cross Border eCommerce, the Net Profit Margin has been, on average, 12.85%, with high-performing merchants reaching over 40%\u0026ensp;margins. EPS, on the other hand, was more volatile with standard deviation of ₹36.74, indicating\u0026ensp;differences in profitability. Average BRSR disclosure score was 68.34, thus revealing that while disclosure quality was moderate-to-good for many companies, substantial improvement is needed by most companies,\u0026ensp;as shown by the maximum score of 95.00. A BRSR score of\u0026ensp;15.42 Standard Deviation indicates that disclosure practices vary greatly among firms.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eSector-wise Average Financial Performance and BRSR Scores\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"7\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eSector\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eROA (%)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eROE (%)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eNPM (%)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eEPS (₹)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c7\"\u003e \u003cp\u003eN\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBanking\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e1.42\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e12.85\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e24.36\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e52.84\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e72.45\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e112\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eInformation Technology\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e18.67\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e21.43\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e18.92\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e68.35\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e78.23\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e118\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eManufacturing\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e6.85\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e13.24\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e8.76\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e38.47\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e62.18\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e132\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ePharmaceuticals\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e12.34\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e16.89\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e14.52\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e45.63\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e65.92\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e88\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003e \u003cem\u003eSource: Author's calculations based on company annual reports and BRSR disclosures\u003c/em\u003e \u003c/p\u003e \u003cp\u003eAs can be seen from Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e, there are considerable variations across sectors in terms of financial performance\u0026ensp;and the quality of BRSR disclosure. Due to the low capital intensity and\u0026ensp;high profit margins typical for knowledge-based industries, the IT sector showed the highest average overall performance on several metrics, with an average return on assets (ROA) of 18.67% \u0026amp; an average return on equity (ROE) of 21.43% Higher the score, more mature\u0026ensp;the reporting and tougher integration of ESG with operations, with IT companies attaining the best score of 78.23 in the BRSR, the report said. Despite relatively lower ROA of 1.42% on account of a high asset base, the banking sector demonstrated healthy NPM (24.36% NPM) and excellent BRSR scores at\u0026ensp;72.45 owing to strict regulatory requirements. Next came manufacturing firms exhibiting moderate ROA of 6.85 (indicating moderate financial performance), but the lowest BRSR scores of 62.18, which may be linked to potentially higher environmental compliance challenges and less competitive positions in terms of\u0026ensp;availability of resources to invest in CSR. Pharmaceutical companies also showed a well-balanced performance with 12.34%\u0026ensp;ROA but moderate BRSR scores with an average of 65.92. The diversity in\u0026ensp;these sectors indicates that industry-specific analyses are needed to assess the impact of sustainability reporting.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eCorrelation Matrix between BRSR Scores and Financial Performance Indicators\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eVariables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eROA\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eROE\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eNPM\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eEPS\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eROA\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eROE\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.724**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eNPM\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.652**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.583**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eEPS\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.487**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.612**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.523**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.342**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.186*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.398**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.275**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"6\"\u003e\u003cem\u003eNote: ** Correlation significant at 0.01 level (2-tailed); * Correlation significant at 0.05 level (2-tailed)\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eCorrelation matrix showing relationships between financial performance indicators and BRSR\u0026ensp;disclosure scores is given in Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e. Financial performance metrics are necessarily positively correlated\u0026ensp;with each other, with ROA (return on asset) and ROE (return on equity) being most correlated pair (0.724) which is to be expected as companies using their assets efficiently also return better results to their shareholders. Onove et al., Journal of Financial Reporting and Accounting 13 5 Page 6 In a partial correlation analysis, BRSR gives a\u0026ensp;statistically significant positive correlation with each of the financial performances indicators, most strongly with NPM (r\u0026thinsp;=\u0026thinsp;0.398, p\u0026thinsp;\u0026lt;\u0026thinsp;0.01) followed by ROA (r\u0026thinsp;=\u0026thinsp;0.342, p\u0026thinsp;\u0026lt;\u0026thinsp;0.01). association with ROE is positive\u0026ensp;as well, but weaker (r\u0026thinsp;=\u0026thinsp;0.186, p\u0026thinsp;\u0026lt;\u0026thinsp;0.05), which indicates that the quality of sustainability reporting is more strongly related to operational efficiency and profitability than to equity returns in India. Although not causal, such positive correlations are certainly suggestive of the hypothesis that BRSR implementation correlates positively with financial performance and needs to be ascertained further through regression\u0026ensp;analyses. The correlations moderately strong (none of them above 0.40) indicate BRSR scores did explain a fraction\u0026ensp;of financial performance variability but that other factors were also playing a significant role.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003ePanel Regression Analysis - BRSR Impact on ROA\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"5\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIndependent Variables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eStd. Error\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003et-statistic\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003ep-value\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.087\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.032\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e2.719\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.007**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFirm Size (Log Assets)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e1.245\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.428\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e2.908\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.004**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFirm Age\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.015\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.018\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.833\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.405\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLeverage Ratio\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-0.042\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.016\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-2.625\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.009**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIT Sector Dummy\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e4.523\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.187\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e3.810\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.000**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-8.342\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e2.456\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-3.397\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.001**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eR-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.387\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eF-statistic\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e56.82\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.000\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"5\"\u003e\u003cem\u003eNote: ** Significant at 1% level; Dependent Variable: ROA\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e: Regression results investigating the impact of BRSR on Return\u0026ensp;on Assets coefficient for BRSR Score is 0.087 \u0026amp; statistically significant (p\u0026thinsp;=\u0026thinsp;0.007),\u0026ensp;meaning that other factors controlled, with a unit increase in the quality of BRSR disclosure, ROA increases by 0.087 percent. A positive relationship here, in support of the hypothesis and in line with the literature, suggests that gaining operational efficiencies goes hand in hand with wide-ranging\u0026ensp;sustainability reporting. Firm size has a significant positive impact (coefficient\u0026thinsp;=\u0026thinsp;1.245, p\u0026thinsp;=\u0026thinsp;0.004) implying economies of scale and resource advantages to generating both\u0026ensp;higher ROA and quality reporting. Variable\u0026ensp;Leverage ratio negatively influences the ROA (coefficient\u0026thinsp;=\u0026thinsp;\u0026minus;\u0026thinsp;0.042, p\u0026thinsp;=\u0026thinsp;0.009), in line with the expectations from financial theory that high levels of debt burdens firms profitability. The IT sector dummy variable exhibits a large positive coefficient at 4.523 (p\u0026thinsp;\u0026lt;\u0026thinsp;0.001), providing strong evidence for\u0026ensp;more efficient asset productivity by technology firms. With an R-squared of 0.387, included variables account for about 38.7 percent of variation in ROA, thus justification additional reasonable explanation of power, result could be affected by other\u0026ensp;unrecorded factors. The\u0026ensp;global model fit is statistically validated by the highly sig. F-statistic.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003ePanel Regression Analysis - BRSR Impact on ROE\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"5\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIndependent Variables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eStd. Error\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003et-statistic\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003ep-value\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.043\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.045\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.956\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.340\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFirm Size (Log Assets)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.874\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.562\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e1.555\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.121\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFirm Age\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-0.028\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.024\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-1.167\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.244\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLeverage Ratio\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.156\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.021\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e7.429\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.000**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBanking Sector Dummy\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-2.345\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.423\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-1.648\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.100\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e5.672\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e3.124\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e1.816\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.070\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eR-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.328\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eF-statistic\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e44.19\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.000\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"5\"\u003e\u003cem\u003eNote: ** Significant at 1% level; Dependent Variable: ROE\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eRegression results where Returnon Equity is dependent variable are shown in Table\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e5\u003c/span\u003e. In particularly BRSR Score coefficient is positive (0.043) and not statically significant (p\u0026thinsp;=\u0026thinsp;0.340), indicating that BRSR disclosure quality has no statistically significant association with ROE\u0026ensp;in the aggregate sample. It is consistent with recent studies of relationship between ESG activities and equity returns for emerging markets showing conflicting results, some reporting no relationship [19, 19, 20]\u0026ensp;and some finding a positive [21] or a negative [22, 23, 24] relationship. Ryan:' Here, perhaps not\u0026ensp;surprisingly, leverage ratio is the leading predictor, significant with strong positive coefficient of 0.156 (p\u0026thinsp;\u0026lt;\u0026thinsp;0.001), which captures the amplification effect of financial leverage on equity returns when firms invest in future projects with positive net present value.' Although\u0026ensp;only marginally insignificant (p\u0026thinsp;=\u0026thinsp;0.100), the banking dummy also displays a negative coefficient (-2.345), suggesting that banks may have a higher equity base which then leads to dilution in the measured ROE. This model has moderate explanatory power with the overall R-squared of 32.8%(33.28, model) showing the portion of ROE changes explained by other variables\u0026ensp;including in model. The inconsequential BRSR\u0026ndash;ROE association indicates that the advantages of sustainability reporting may be realized through operational enhancements rather than direct equity\u0026ensp;return augmentations, at least for the near-term covered in this analysis.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab6\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 6\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003ePanel Regression Analysis - BRSR Impact on Net Profit Margin\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"5\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eIndependent Variables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCoefficient\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eStd. Error\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003et-statistic\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003ep-value\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eBRSR Score\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.124\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.038\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e3.263\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.001**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFirm Size (Log Assets)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.687\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.491\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e1.399\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.163\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFirm Age\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.042\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.021\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e2.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.046*\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eLeverage Ratio\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-0.067\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e0.018\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-3.722\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.000**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ePharma Sector Dummy\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e3.124\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.289\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e2.424\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.016*\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-2.456\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e2.867\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-0.857\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.392\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eR-squared\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.412\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eF-statistic\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e62.47\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.000\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003ctfoot\u003e \u003ctr\u003e\u003ctd colspan=\"5\"\u003e\u003cem\u003eNote: ** Significant at 1% level; * Significant at 5% level; Dependent Variable: NPM\u003c/em\u003e\u003c/td\u003e\u003c/tr\u003e \u003c/tfoot\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eBRSR has\u0026ensp;a positive and significant effect on Net Profit Margin, which can be seen in Table\u0026nbsp;\u003cspan refid=\"Tab6\" class=\"InternalRef\"\u003e6\u003c/span\u003e. This relationship is one of the strongest evidence we will find out of\u0026ensp;this study as a 0.124 (p\u0026thinsp;=\u0026thinsp;0.001) coefficient indicates that for every 1 unit improvement in BRSR score, the NPM increases by 0.124 percentage point. This result implies that, at least in the case\u0026ensp;of the firms which did report, comprehensive sustainability reporting is associated with improved profitability, perhaps through operational efficiencies, cost savings and higher sales to sustainability-conscious consumers. Firm age has\u0026ensp;a slight positive effect (coefficient\u0026thinsp;=\u0026thinsp;0.042, p\u0026thinsp;=\u0026thinsp;0.046), showing that older firms with superior processes enjoy better margins. The leverage ratio again has large and significant negative\u0026ensp;impact (coefficient=-0.067, p\u0026thinsp;\u0026lt;\u0026thinsp;0.001), consistent with debt servicing costs reducing profitability. This industry characteristic of patent-protected profits translates into an above normal industry profit noticeably reflected in the significant positive coefficient of\u0026ensp;3.124 (p\u0026thinsp;=\u0026thinsp;0.016) for the pharmaceutical sector dummy Our\u0026ensp;model with control variables (highest R-squared of 0.412 among specifications examined) shows that both BRSR quality and control variables jointly explain variation in NPM. Our findings provide robust empirical evidence of the benefits of\u0026ensp;integrated sustainability disclosure.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab7\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 7\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eYear-wise Trend Analysis of BRSR Adoption and Financial Performance\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFiscal Year\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCompanies Reporting BRSR\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eAvg BRSR Score\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eAvg ROA (%)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eAvg ROE (%)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eAvg NPM (%)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2021-22\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e45 (30%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e58.32\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e7.86\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e13.92\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e11.45\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2022-23\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e150 (100%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e68.45\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e8.52\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e14.78\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e12.98\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2023-24\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e150 (100%)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e74.25\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e8.88\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e15.31\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e13.92\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eGrowth Rate\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e27.3%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e13.0%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e10.0%\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e21.6%\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003e \u003cem\u003eSource: Longitudinal analysis of sample companies' BRSR reports and financial statements\u003c/em\u003e \u003c/p\u003e \u003cp\u003eTemporal trends shown in Table\u0026nbsp;\u003cspan refid=\"Tab7\" class=\"InternalRef\"\u003e7\u003c/span\u003e suggest that the quality of BRSR disclosure as well as the financial performance continue to improve over the\u0026ensp;period of the study. Participating under voluntary BRSR route, documented\u0026ensp;only 30% of sampled companies with average score of 58.32, which demonstrates initial hiccups in implementation during 2021-22. The compulsory adoption in 2022-23 led to universal coverage, with average scores improving to 68.45, a 17.4% increase highlighting both learning by doing effects and better reporting\u0026ensp;infrastructure. The improve led to the averages attaining\u0026ensp;a 74.25 by 2023\u0026ndash;24, a 27.3% improvement in three years. At the same time, financial performance\u0026ensp;metrics continued to trend upwards. An\u0026ensp;improvement of 13.0% (from 7.86% to 8.88%), indicates firms did better with regards to using high quality resources; suggesting improved efficiency, perhaps driven by sustainability initiatives. Over the same time frame, ROE increased 10.0% from 13.92% to 15.31% and NPM had the highest growth of 21.6%, from\u0026ensp;11.45% to 13.92%. The progress on these fronts concomitantly argues for the hypothesis that BRSR adoption is coupled with an improvement in financial performance, although it is impossible\u0026ensp;to establish strict causality due to confounders operating in the form of economic boom, market condition and individual firms' progress. These data hint at a maturation process wherein companies first\u0026ensp;flail against the requirements of disclosure, only to move on to deeper integration of sustainability into core operations, and ultimately to reap the benefits in the form of improved sustainability reporting and better performance.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e"},{"header":"7. Discussion","content":"\u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eOur empirical findings advance the emerging literature on financial implications of sustainability reporting in emerging markets by adding context-specific\u0026ensp;insights about India's unique BRSR initiative as a mandatory framework. The findings, which show the mixed results of BRSR\u0026ensp;implementation, reinforce and challenge existing understanding by revealing sector-specific and metric-dependent BRSR-financial performance relationships and linking their outcomes to sustainability reporting strategic propositions with significant caveats. In line with propositions of the stakeholder theory, positive \u0026amp; significant association between BRSR disclosure quality \u0026amp; ROA reflects that reporting\u0026ensp;on the varied stakeholder interests creates operational efficiencies and competitive advantages to the firms, which in turn leads to the enhancement in the financial performance of the firms. It is more likely that companies with higher BRSR scores have taken systematic\u0026ensp;steps towards ESG management whether it be in energy efficiency, waste reduction or employee welfare and this will either directly lower costs or reduce their propensity to create supply chain shocks through litigation. This result\u0026ensp;is consistent with that of Rao et al. As per the conclusion of Beal et al. (2023), ESG practices affect the profitability in various ways, while their study reported different effects along the ROE distribution quantiles in\u0026ensp;the Nifty 50 companies.\u003c/p\u003e \u003cp\u003eAlthough BRSR-ROE relationship was expected to be significant,\u0026ensp;reported un-significant has plausible interpretation, especially from the capital structure characteristic of firm and behavioral pattern of investors in India. Dash and Rout (2025) reports similar negatives of ESG-Tobin's Q relationships, which they suggest occur as a result\u0026ensp;of pressure on investors due to potential short-term costs of sustainability investments. benefits of sustainability initiatives can take years to trickle through into shareholder value, so\u0026ensp;the three-year study period could have been too short to identify a lasting improvement in ROE. The high proportion of retail investors in India and the generally short-term focus on price movements and dividend yields being the drivers for equity markets, ESG was not found to\u0026ensp;be relevant over the long term \u0026ndash; a finding that might lend weight to this alleged 'disconnect' between BRSR quality and epuivty returns. Particularly interesting is the high positive association between BRSR scores and Net Profit Margin, suggesting that perhaps formal (comprehensive)\u0026ensp;sustainability report is the most strongly related to bottom line performance. However, this relationship could be realized through a myriad of pathways: premium pricing of product produced sustainably; avoided costs from efficient use of resources; avoided or lower-potential compliance\u0026ensp;costs with regulations at multiple levels (local, national and international) through proactively managing ESG issues; as well as higher brand valuations attracting quality-conscious customers. Consistent with investments in R\u0026amp;D as a mediating variable, Goud (2025) also finds comparable positive relationships between measures of ESG disclosure and profitability, wherein the concentration on R\u0026amp;D seems especially important as their new interpretive explanation is that innovative firms are more efficient or effective at creating value\u0026ensp;with respect to sustainability initiatives.\u003c/p\u003e \u003cp\u003eThis paper emphasizes the importance to take kind of context into account as sector-specific differences were suggested by\u0026ensp;the ESG-performance relationship proposed in this study. Lower BRSR scores are statistically significant at every level of investment where the IT firms score worse than all other industries or worse compared to certain sectors i.e. more environmental efficiencies offered by the IT sector, highly skilled independent thought skills base here they place value\u0026ensp;on corporate responsibility and investors prefer governance and social particularly when the IT firms have efficient processes in place. Looking at the banking sector,\u0026ensp;effects on compliance with disclosures as well as second order rammificatons about ROE due to capital availability are revealed. The fact that the BRSR scores of manufacturing firms tend to be lower and their financial performance moderate may reflect several negative effects (\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e) Compliance costs are typically proportionately higher for companies in high-carbon industries, gradually retarding investment rates; (\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e) complement with legacy systems and operational processes have not made inclusion of sustainability information into\u0026ensp;collaborating with teams' actions and business models just miserable. Patterns of sectors are similar as with Agarwal et\u0026ensp;al. Corroboration of the results of material\u0026ensp;variation in ESG-performance relationship across sectors in India by Ghosh et al. Temporality The fact that both T4 BRSR score and financial performances improve over a\u0026ensp;3 year period suggest that the two are actually positively related (causation still unclear). Several alternative explanations merit consideration. It\u0026rsquo;s one of a couple of things: The economy has rebounded\u0026ensp;post-COVID-19, possibly increasing firm profits which in turn would be associated with more coverage of sustainability. I) This does not then allow to dismiss the reverse causality effect (that of wealthier\u0026ensp;firms investing in compliance with BRSR), also consistent with Kajal and Bansal finding evidence of causal link between firm size (a proxy for acquisition complementary resources) on disclosure quality. Lastly, the positive correlation may be due\u0026ensp;omitted variables such as quality of management or corporate culture that facilitate achieving both sustainability as well financial performance.\u003c/p\u003e \u003cp\u003eThe findings of this\u0026ensp;study are relevant to various entities. BRSR is not something that corporate executives can merely check off the box \u0026ndash; it should be seen as a strategic value-creation opportunity\u0026ensp;to enhance operational efficiency, relationships with stakeholders and long term value creation. Thus prioritising exposure quality (in particular in terms of the former's dimension on quantitative\u0026ensp;KPIs and assurance), appears to be justifiable given performance-related relationships. Investors should incorporate high quality BRSR work into their valuation models, due to the fundamental immunity \u0026amp; resilient of\u0026ensp;better ESG-integrated companies (though of course short-term equity returns will not necessarily reflect such benefit). The second is the request for more attention to sector specific implementation support, particularly (in the case of manufacturing) smaller firms struggling with disclosure requirements; all combined however with retaining and/or strengthening of the now mandatory nature of reporting so that we do not slip back into voluntary framework\u0026ensp;limitations. The study\u0026ensp;also pinpoint several relevant items for policy. More than four years after its first report on the topic, NSE, CFA Institute \u0026amp; CFA\u0026ensp;Society India (2024) still point to problems with data quality - mis-reported units of measure, sources of data and incomplete disclosure. Further, SEBI could also look at\u0026ensp;prescribing atleast standardised templates (e.g., for capturing quantitative metrics) for BRSR Core indicators as well, and explore the inclusion of third-party assurance for those indicators to strengthen them. Efforts to level the playing field in the quality of disclosure could be made through capacity building programmes\u0026ensp;targeted at smaller firms and traditional sectors. Furthermore, incorporating BRSR data\u0026ensp;into credit rating assessments and can pave way for real ESG integration (not box ticking) in investment mandates.\u003c/p\u003e \u003cp\u003eContribution to Knowledge Theoretically, this research contributes by empirically validating\u0026ensp;stakeholder theory in the emerging economy context of India where sustainability reporting adds value by aligning corporate activities across a range of interests of multiple stakeholders. Notably, are associated with contrasting effects under different performance metrics, which provide support to contingency theory that ESG\u0026ndash;performance relationships vary with contexts including industry conditions, institutional settings and level of\u0026ensp;market development. Our evidence that ratios have significant and substantive effects on all performance measures and mediate BRSR effects so material cannot be dismissed\u0026ensp;out of hand suggest that financial structure needs to be factored into ESG strategy formation. The constraints of the present\u0026ensp;study have provided us with an angle for further exploration. And while the three years happens to be the first phase of implementation for BRSR, three years is still too short a time\u0026ensp;frame to judge long-term impacts particularly regarding equity returns and market valuations. Firms that have been followed for five or ten years would be useful in sorting out whether\u0026ensp;patterns that are developing persist, intensify or reverse. The focus on listed companies is one of the major limitations in terms of generalizability to India Inc.\u0026ensp;which consists of a large number of SMEs. Research on companies that report BRSR as a\u0026ensp;voluntary act (rather than an obligatory reporting requirement) may provide insight into the relative importance of intrinsic versus extrinsic motivations driving firms to report their sustainable performance. Additional qualitative studying examining management viewpoints, hurdles in implementation and the\u0026ensp;process of strategic integration of BRSR in organizations could complement the quantitative results and together result to an enhanced measurement of BSR across organizations.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e"},{"header":"8. Conclusion","content":"\u003cp\u003e \u003cdiv class=\"BlockQuote\"\u003e \u003cp\u003eThe BRSR-Financial performance relationship of the 150 listed Indian firms is a hot topic for academic and corporate debate from the fiscal year 2021-22 to 2023-24 and this study provides some empirical evidence about these\u0026ensp;debates of the ESG firms' financial performance relationship of an emerging market like India. The results exhibit intricate, nuanced relationships as BRSR disclosure quality shows significant positive associations with operational efficiency measures (ROA) and profitability variables\u0026ensp;(NPM) but neutral associations with equity returns (ROE). In sector-specific assessments, we found considerable heterogeneity, with positive correlations\u0026ensp;being particularly strong for information technology and banking, and weaker ones for the manufacturing and pharmaceutical sectors. The positive BRSR-ROA and BRSR-NPM links substantiate stakeholder theory propositions that extensive sustainability\u0026ensp;reporting offers value via operational efficiencies, cost savings, and increased trust of stakeholders. Corporations having better BRSR scores seem\u0026ensp;to be able to manage ESG in a more systematic manner and this is reflected in their superior performance. Nonetheless, the insignificance of BRSR-ROE relationship indicates that sustainability efforts are unlikely to be rewarded by the equity market participants in the short-run, which may happen due to investors view paper as short-run costs incurred without an understanding of long-run value creation\u0026ensp;mechanisms.\u003c/p\u003e \u003cp\u003eConclusion Temporal trends indicated similar upward movement in BRSR disclosure quality alongside financial performance, as BRSR scores increased by an average of 27.3% while the ROA, ROE and NPM\u0026ensp;grew by 13.0%, 10.0%, and 21.6%, respectively, during the study period. Although this is observational data with\u0026ensp;a short time span, so causality is limited, these trends imply positive associations. However, these potential confounders (reverse causality, omitted variable bias, other\u0026ensp;concurrent economic developments) last merit consideration. This work has real-world implications for managers,\u0026ensp;investors, and policymakers. Far from being a regulatory compliance check, BRSR is an opportunity for executives to invest in stronger ESG management systems including\u0026ensp;transparency through ESG disclosure and communication. Based on the above, investors should include BRSR as an\u0026ensp;input into their valuation frameworks, as firms with better quality sustainability integration may show better fundamentals and long-term resilience. Policymakers must keep continuing the improvement of the reporting frameworks; ensure the efforts in data quality; offer the sectoral implementation assistance; and incentivize true ESG risk integration via credit ratings and investment\u0026ensp;guidelines.\u003c/p\u003e \u003cp\u003eFuture research could include longitudinal studies that assess long-term effects of BRSR across spans of time, qualitative work that explores implementation issues and management perceptions, between few voluntary and mandatory reporters and between those that also investigate mediating variables like the quality of corporate governance, the level of R\u0026amp;D investment and\u0026ensp;the variety of stakeholder engagement mechanisms utilized. With time, as the sustainability reporting\u0026ensp;ecosystem in India matures, and time-series data becomes available, conclusive insights on causation and longer-term effects will come about. This study not only add in to the limited empirical literature related to financial and market impact of MDR on sustainability reporting from unique regulatory and market context of India but also aids corporate leaders, investors and policy\u0026ensp;makers to take informed decision to face the challenges of transition to sustainable business practice.\u003c/p\u003e \u003c/div\u003e \u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAgarwal B, Gautam RS, Jain P, Rastogi S, Bhimavarapu VM, Singh S (2023) Impact of environmental, social, and governance activities on the financial performance of Indian health care sector firms: Using competition as a moderator. J Sustainable Finance Invest 13(1):125\u0026ndash;148\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eAlshehhi A, Nobanee H, Khare N (2018) The impact of sustainability practices on corporate financial performance: Literature trends and future research potential. 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Int J Bus Excellence 19(1):100\u0026ndash;118\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eBroadstock DC, Chan K, Cheng LTW, Wang X (2021) The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China. Finance Res Lett 38:101716\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eEccles RG, Ioannou I, Serafeim G (2014) The impact of corporate sustainability on organizational processes and performance. Manage Sci 60(11):2835\u0026ndash;2857\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"Datta Meghe Institute of Medical Sciences","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"BRSR, Sustainability Reporting, Financial Performance, ESG Disclosure, Listed Companies","lastPublishedDoi":"10.21203/rs.3.rs-8917099/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8917099/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eOne of key tools that makes corporate governance in India more transparent and accountable is corporate sustainability reporting. The impact of Business Responsibility \u0026amp; Sustainability Reporting (BRSR) on financial performance of Indian listed companies is examined in this study. The study uses a quantitative methodology and is based on a panel data set of 150 listed businesses from National Stock Exchange for the fiscal years 2021\u0026ndash;22 to 2023\u0026ndash;24. Four variables of the selected financial performance indicators such as Return on Equity (ROE), Return on Assets (ROA), Net Profit Margin (NPM), \u0026amp; Earnings Per Share (EPS) are used to measure financial performance. This supports our theory that BRSR adoption improves financial performance metrics. Results indicate that there are different relationships between financial performance and the quality of BRSR disclosure, with significant positive correlation with ROA and NPM and a neutral to negative association with ROE in some\u0026ensp;sectors. Our statistical finding contrast\u0026ensp;by sectors, while the information technology and banking sectors exhibit strong positive correlations, the manufacturing sectors do not. The study concludes that improvements in long-term sustainability and stakeholder trust arising from BRSR are dependent upon specific industrial sector and are compensated through differential short-term financial\u0026ensp;impacts.\u003c/p\u003e","manuscriptTitle":"Corporate sustainability reporting under BRSR: Impact on financial performance of listed Indian Firms","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2026-02-20 10:05:14","doi":"10.21203/rs.3.rs-8917099/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"425fa1aa-5ed5-4bb5-89e1-e52ba6f98e26","owner":[],"postedDate":"February 20th, 2026","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":63196450,"name":"Finance"},{"id":63196451,"name":"Other Economics"}],"tags":[],"updatedAt":"2026-02-20T10:05:14+00:00","versionOfRecord":[],"versionCreatedAt":"2026-02-20 10:05:14","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8917099","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8917099","identity":"rs-8917099","version":["v1"]},"buildId":"XKTyCvWXoU3ODBz1xrDgd","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}