Corporate ESG Performance and Climate Resilience: A Pathway for India’s Nifty 50 Firms towards a Developed Economy
Keywords:
ESG, Climate Performance, NLP, GMMAbstract
This study investigates the effect of Environmental, Social, and Governance (ESG) performance on corporate climate outcomes with the help of a dynamic panel analysis. This study builds firm-level climate and ESG measures using textual analysis based on Latent Dirichlet Allocation (LDA), lexicon-based methods or Natural Language Processing (NLP) on annual reports of Nifty 50 firms from India between 2021 and 2025, rather than relying on third-party ESG ratings. The analysis includes the use of a System Generalized Method of Moments (System GMM) estimator that handles endogeneity, dynamic persistence, and unobserved heterogeneity. The empirical results show that the engagement in ESG has a positive and statistically significant effect on the climate performance of the companies, meaning that the more positive the ESG performance, the better the companies' scores on the climate performance dimension are. The results also indicate a high level of over time consistency of climate performance and the determinants of firm-specific financial and governance controls are statistically not significant. The Hansen overidentification test and Arellano–Bond serial correlation tests confirm the validity of the estimated model.Downloads
References
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