IFRS and ESG Disclosure in Indian Corporate Sector

Abstract

World-wide, there is movement toward embracing environmental, social, and governance (ESG) issues in corporate conduct and performance. These developments have led to movement toward “reimagining capitalism,” and many firms have ridden the wave of investor enthusiasm for firms that prioritize ESG disclosures. The present study examines the role of International Financial Reporting Standards (IFRS) in India on ESG and overall ESG reporting. The Indian capital markets regulator, SEBI, had made integrated reporting compulsory for listed firms to disclose information about matters that substantively affect the organization’s ability to create value over the short, medium, and long term at a time. Motivated by this episode, we examine how accounting regulations in the form of IFRS could influence ESG disclosures in India. Based on the ESG scores of 104 non-financial firms in India from 2013 to 2021, the study finds a positive relationship between ESG reporting and IFRS introduction in India. The performance of firms (return on assets) and leverage had a negative impact on ESG disclosures. JEL Codes: G14, K22, L51, M38, M41

Analyzing the Dynamic Relationship Between ESG Scores and Firm Value in Chinese Listed Companies: Insights from Cross-Lagged Analysis

“…The complex relationship between Environmental, Social, and Governance (ESG) factors and firm value has been the subject of extensive research [13,14,29,[33][34][35][36]. Through rigorous analysis, studies have demonstrated that higher ESG disclosure scores have a significant positive impact on firm value [4,11,37], innovation performance [35,36], and cost of equity capital [38].…”