The Effect of Sustainability Reporting on Firm Value: Insights from Leading Indian Public Banks

Abstract

The present study investigated the effects of sustainability disclosure on the market value of selected Indian public banks over the course of seven years (2017-2023). It also establishes the association between the variables of firm value and sustainability disclosures. It also emphasizes the framework for gaining access to the link among sustainability disclosures and firm value along with details of dependent, independent and control variables. The study analyzed data of selected Indian public banks from the moneycontrol and additional secondary sources. The study employed descriptive analysis methods to examine the required sustainability disclosures adopted by banks and conducted causal research to assess the influence of voluntary disclosures on financial variables. This research investigates the impact of sustainability disclosure practices among selected Indian banks. The analysis incorporated firm-specific dependent variables, including Tobin- Q, alongside three control factors: firm size, firm age, and market capitalization. Using a fixed effects panel regression model, the study found a significant association between sustainability reporting disclosure and financial performance. The study also offers valuable insights for banking professionals, fosters customer loyalty by promoting transparency and maintain trust and good relations with investors and creditors that will invest in the company. The confidence feeling of investors and creditors in the corporate accountability will enhance the company's reputation or image.