IMPACT OF ESG INDEX ON STOCK AND FIRM PERFORMANCE IN THE INDIAN STOCK MARKET

Environmental, Social, and Governance (ESG) criteria have grown in importance in the global financial
landscape in recent years. This research investigates the dynamic relationship between ESG indices and stock
and firm performance in the Indian stock market. We hope to shed light on the potential benefits and challenges
of incorporating sustainable practises into investment strategies in the Indian context by examining the impact of
ESG factors. The purpose of this research is to determine whether higher ESG ratings lead to superior returns by
assessing the correlation between ESG index scores and stock performance of companies listed on the Indian
stock exchange.to investigate the impact of ESG factors on the financial performance and risk profiles of Indian
stock market firms, with a focus on identifying key drivers of sustainable business practises and their impact on
long-term value creation. This study uses a descriptive research design to examine the impact of the ESG index on
stock and firm performance in the Indian stock market. The stratified random sampling procedure will be used in
this study to ensure representation from various regions and industries in India, increasing the validity of the
study's findings and sample size 218. Our findings shed light on the relationship between ESG indices and stock
and firm performance in the Indian stock market. The study found a link between strong ESG performance and
higher stock returns, proving the importance of sustainability to investors. Firms with strong ESG profiles also
have better financial stability and risk management. These findings highlight the dual benefits of incorporating
ESG considerations into investment decisions in the Indian market, fostering financial growth and sustainable
development.