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<p>This study examines the relationship between Environmental, Social, and Governance (ESG) scores and shareholder value creation, measured through Economic Value Added (EVA) and Market Value Added (MVA). Using panel data from 220 Indian nonfinancial firms listed on the National Stock Exchange (NSE 500) between 2015 and 2020, we explore whether ESG disclosures enhance or detract from shareholder value. The results reveal a negative relationship between ESG scores and EVA driven by high expenditures on ESG activities without immediate financial gains. Conversely, ESG scores are positively associated with MVA, suggesting long-term market benefits. The findings underscore the dichotomy between the short-term operational impact and the long-term market perception of ESG initiatives. This study has implications for managers and policymakers who aim to balance sustainability goals with shareholder expectations.</p>

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Understanding the ESG-value creation link through EVA and MVA in emerging market firms in the pre-pandemic context

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年4月30日

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  • Medha Doshi,
  • Dipasha Sharma,
  • Deepraj Mukherjee,
  • Satish Kumar

摘要

This study examines the relationship between Environmental, Social, and Governance (ESG) scores and shareholder value creation, measured through Economic Value Added (EVA) and Market Value Added (MVA). Using panel data from 220 Indian nonfinancial firms listed on the National Stock Exchange (NSE 500) between 2015 and 2020, we explore whether ESG disclosures enhance or detract from shareholder value. The results reveal a negative relationship between ESG scores and EVA driven by high expenditures on ESG activities without immediate financial gains. Conversely, ESG scores are positively associated with MVA, suggesting long-term market benefits. The findings underscore the dichotomy between the short-term operational impact and the long-term market perception of ESG initiatives. This study has implications for managers and policymakers who aim to balance sustainability goals with shareholder expectations.