Carbon Emissions and Corporate Financial Performance: Evidence from NIFTY 50 Companies

Abstract

This study critically examines the relationship between carbon emissions intensity and corporate financial performance among NIFTY 50 companies in India over the period 2016–2025. In contrast to prior literature focusing on aggregate ESG scores, this study emphasizes specific environmental intensity metrics, particularly Travel Emissions per Sales and Travel Emissions per Employee, as proxies for operational carbon efficiency. Using panel data derived from ESG disclosures and financial statements, the study employs descriptive statistics, correlation analysis, and multiple regression techniques to assess the direct, mediating, and moderating effects of environmental indicators on financial outcomes, measured through Return on Assets (ROA) and Return on Equity (ROE). The findings reveal a statistically significant negative relationship between emission intensities and financial performance, suggesting that firms with higher carbon inefficiency experience reduced profitability. The study contributes to ESG literature by providing robust empirical evidence from an emerging economy and highlights the strategic importance of environmental efficiency in corporate governance and financial decision-making.