Linkages between Environmental, Social, and Governance Practices and Financial Performance in the Indian Electronics Industry

Jialal Koundal; Sapan Koundal; Sonali Koundal

Linkages between Environmental, Social, and Governance Practices and Financial Performance in the Indian Electronics Industry

Author(s)	Dr. Jialal Koundal, Mr. Sapan Koundal, Ms. Sonali Koundal
Country	India
Abstract	The relationship between environmental, social, and governance (ESG) practices and corporate financial performance (CFP) has been one of the most extensively debated questions in management and finance research for over four decades, yet the evidence remains fragmented for emerging economies and virtually unexamined for individual manufacturing sectors within them. This chapter reviews the theoretical and empirical literature on the ESG–CFP relationship and situates it within the Indian electronics industry, a sector experiencing extraordinary policy-led growth while simultaneously confronting acute sustainability challenges relating to electronic waste, energy and resource intensity, labour conditions in assembly operations, and evolving disclosure obligations. Drawing on stakeholder theory, the natural-resource-based view, legitimacy and institutional theories, and agency-theoretic counterarguments, the chapter synthesises evidence from global meta-analyses and Indian empirical studies, identifies mechanisms and boundary conditions that shape the ESG–CFP linkage, and highlights measurement and endogeneity concerns that qualify existing findings. The review reveals a pronounced gap: despite the electronics sector’s scale and its distinctive ESG risk profile, sector-specific evidence on whether and how ESG practices translate into financial outcomes in Indian electronics firms is scarce. The chapter therefore develops an integrative conceptual framework in which institutional and stakeholder pressures drive the adoption of ESG practices, whose financial consequences are transmitted through mediating mechanisms—operational efficiency, reputation and legitimacy, innovation, employee productivity, financing advantages, and risk mitigation and conditioned by firm-level and industry-level moderators. Eight research propositions are advanced and formalised into testable hypotheses, and a positivist, deductive, longitudinal panel research design covering variables, data sources, and model specifications is set out to guide the empirical work in journals.
Keywords	ESG; corporate financial performance; Indian electronics industry; sustainability; BRSR; stakeholder theory; conceptual framework
Field	Business Administration
Published In	Volume 8, Issue 4, July-August 2026
Published On	2026-08-16

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Linkages between Environmental, Social, and Governance Practices and Financial Performance in the Indian Electronics Industry

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