ABSTRACT
Environmental, social, and governance (ESG) considerations have become important markers of long-term success and corporate sustainability in recent years. This study looks at how the stock returns of NIFTY Energy sector companies relate to Environmental, social, and governance (ESG) considerations. Investors and policymakers must comprehend the financial influence of ESG metrics in light of the growing emphasis on sustainable investing. This study evaluates the impression of ESG scores on stock returns using data from 2022 to 2025 and correlation analysis, regression modelling, and risk-adjusted performance evaluations. The results indicate that while environmental and social factors have mixed effects on stock performance, governance factors are important. However, the overall impact of ESG scores on stock returns remains statistically insignificant. The study highlights the need for a broader approach to investment analysis, considering both ESG compliance and fundamental financial indicators. Additionally, this research explores why ESG factors fail to significantly impact stock returns and suggests avenues for future research on the role of ESG in financial markets.
