DIP: 18.02.S22/20251004 
DOI: 10.25215/2455/1004S22 
Abstract
The need for Sustainable development with already mandated Corporate Social Activities have led to a rise in ESG reforms. The Environmental, Social & Governance (ESG) factors have now become a crucial element in evaluating a company’s sustainable commitment and ethical practices with a conscious view of generating financial returns. This study examines the relationship between ESG ratings and firm profitability. The dependent variables used to measure profitability are Return on Assets (ROA), Return on Capital Employed (ROCE) and Return on Equity (ROE). Individual Environment, Social, Governance and combined ESG ratings are used as Independent Variables. Panel Data Analysis is carried out for a period of two years 2023 & 2024 on top 50 Indian Companies based on market capitalization. Descriptive and Correlation analysis shows moderate ESG performance across firms. Hausman test is used to identify the appropriate regression model. Diagnostics tests such as Pesaran CD, Ramsey Reset Test and VIF factors is used to determine the better applicability of the model. The findings suggest that Environment ratings significantly effects ROA and ROCE. Social rating is negatively associated with the firm performance, Governance rating and ESG rating show no significant influence due short observation period. These findings suggest that ESG disclosure not only enhances social accountability but also aligns with financial returns. The study provided insights for investors & corporate managers to integrate ESG factors for strategic decision making.
The author(s) appreciates all those who participated in the study and helped to facilitate the research process. 
The author(s) declared no conflict of interest. 
ISSN 2455-670X