A study on relationship between sustainable business practices and financial performance of listed ceramic companies in india

Abstract

Sustainability is a decisive issue for corporate world today. The attention of investors in Socially Responsible Investment (SRI) has grown-up substantially over last decade. Thus, sustainability has potential to influence company performance. The determination of this research is to find whether sustainable companies are more profitable . Various researches were conducted in past for examining this relationship. Results, however, have been mixed and inconclusive. Moreover, most of the studies have been conducted in context of developed countries. The purpose of this research is to scrutinize impression of sustainability rating of company on its financial performance in an Indian context using secondary data. We also separately analyze impact of four key components of sustainability (i.e. Community, Employees, Environment and Governance) on financial performance. We find no substantial association between overall sustainability rating and financial performance. However, further analysis reveals that four components of sustainability have significant but changeable impact on financial performance.