Title: Impact of environmental, social and governance engagements on financial distress under competition: evidence from non-financial firms listed in India

Authors: Jagjeevan Kanoujiya; Kuldeep Singh; Shailesh Rastogi

Addresses: Symbiosis Institute of Business Management Pune, Symbiosis International (Deemed University), Pune, India ' Symbiosis Institute of Business Management Pune, Symbiosis International (Deemed University), Pune, India ' Symbiosis Institute of Business Management Pune, Symbiosis International (Deemed University), Pune, India

Abstract: Nowadays, environmental, social and governance (ESG) engagements are placed at focal point by the stakeholders in the firms. A strong investment plan now considers ESG aspects for investment decisions to improve risk and engender sustainable benefits for investors. Hence, this study proposes to investigate the impact of ESG engagements on firm's financial distress (FD). A panel data analysis is applied on the dataset of 76 listed non-financial firms in India under BSE100 for the period 2016-2020. The findings reveal that the ESG practices alone do not affect firm's FD. The higher competition increases the FD. However, when ESG works under high competition, it enhances FD or reduces financial stability. The findings give novel and interesting evidence and contribute significantly into the existing knowledge body of ESG and FD. The findings imply and recommend all the stakeholders to consider ESG activities as a critical element for firm's FD.

Keywords: environmental; social and governance; environmental, social and governance; ESG; CSR; distress; competition; panel data; India.

DOI: 10.1504/IJCG.2023.130759

International Journal of Corporate Governance, 2023 Vol.13 No.3, pp.277 - 296

Received: 10 Oct 2022
Accepted: 13 Feb 2023
Published online: 04 May 2023 *