SUSTAINABLE,

RESPONSIBLE AND
IMPACT INVESTING:

EMPIRICAL Presented by: Group 5

EVIDENCES FROM Aditya Anand 19P184

ESG COMPLIANCE Ashish Pandey 19P192

Kushaagr Panwar 19P202
Priyam Dixit 19P209
Shefali Verma 19P221
Vishal Sharma 19P235
What is sustainable or responsible investing?
ESG or sustainable investing refers to the environmental, social, and governance practices of an investment that may have a
material impact on the performance of that investment. The integration of ESG factors is used to enhance traditional financial
analysis by identifying potential risks and opportunities beyond technical valuations. While there is an overlay of social
consciousness, the main objective of ESG valuation remains financial performance.

What is impact investing?

In impact or thematic investing, positive outcomes are of the utmost importance—meaning the investments need to have a
positive impact in some way. So the objective of impact investing is to help a business or organization accomplish specific goals
that are beneficial to society or the environment. Investing in a non-profit dedicated to the research and development of clean
energy, regardless of whether success is guaranteed, is an example.

What Are Environmental, Social, and Governance (ESG) Criteria?

Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious
investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of
nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities
where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder
rights.
Who are sustainable, responsible and impact investors?
 
SRI investors comprise individuals, including average retail investors to very high net worth individuals and family offices, as
well as institutions, such as universities, foundations, pension funds, nonprofit organizations and religious institutions. There
are hundreds of investment management firms that offer SRI investing funds and vehicles for these investors.
 
Practitioners of sustainable, responsible and impact investing can be found throughout the United States. Examples include:
 
Individuals who invest—as part of their savings or retirement plans—in mutual funds that specialize in seeking companies
with good labor and environmental practices.
Credit unions and community development banks that have a specific mission of serving low- and middle-income
communities.
Hospitals and medical schools that refuse to invest in tobacco companies.
Foundations that support community development loan funds and other high social impact investments in line with their
missions.
Religious institutions that file shareholder resolutions to urge companies in their portfolios to meet strong ethical and
governance standards.
Venture capitalists that identify and develop companies that produce environmental services, create jobs in low-income
communities or provide other societal benefits.
Responsible property funds that help develop or retrofit residential and commercial buildings to high energy efficiency
standards.
Public pension plan officials who have encouraged companies in which they invest to reduce their greenhouse gas emissions
and to factor climate change into their strategic planning.
 Problem Statement

To understand the relationship between Firms performance, environment, social and governance reporting
using the Empirical evidences from ESG compliant firms.
 Variables
Dependent variables:
All the data has been collected
ROA: Return on Asset
through secondary research from
TOBINQ: Tobin Q Ratio
Bloomberg
ROE: Return on Equity

Independent variables:
ESG scores
ESG: ESG disclosure score
ENV: Environment disclosure score
SOC: Social disclosure score
GOV: Governance disclosure score
Control variables:
Governance variables TOTALEMP: Total employee in organization
INDP: Independent directors WOMEMP: Total women employee
GRI: GRI compliance CSRSUST: CSR Sustainability Committee
BRD SIZE: Board size NWT: Number off times net worth
WOMEN: Women in board TOTSALES: Total sales
CEODUL: CEO Duality SALGWT: % Sales growth
BRDMEETYR: Board meeting per year ETINM: Total Net income
Group was allocated United Kingdom’s FTSE 100
The Financial Times Stock Exchange Group (FTSE), also known by the nickname of “Footsie,” is an
independent organization. It is similar to the Standard & Poor’s, which specializes in creating index offerings
for the global financial markets.
The FTSE 100 is often considered a leading indicator of prosperity for the United Kingdom (UK) companies
and the UK economy in general. As such it typically draws investors looking for exposure to big UK
companies. While several of its listings do include companies with homes outside of the UK, it is most
significantly made up of UK companies and impacted by UK daily developments.
The top four holdings by market cap were:
1. (RDSB.L) ROYAL DUTCH SHELL PLC B               2. (RDSA.L) ROYAL DUTCH SHELL PLC-
A              
3. (ULVR) Unilever PLC          4. (HSBA.L) HSBC HOLDINGS PLC
Data Collection Sheet
Descriptive statistics
Descriptive
statistics used
in the study
are:
mean, sum,
min, max,
st.dev.,
variance,
skewness,
kurtosis

They are used

to summarise
the given data
set. They are
broken in the
measures of
central
tendency and
measures of
variablity
REGRESSION ANALYSIS-ROA DEPENEDENCE
 REGRESSION ANALYSIS-ROA DEPENEDENCE
High correlation:NETINM,NETPRF,ZSCORE
Medium correlation:ESG,ENV,SOC,GRI,BRDSIZE(-),WOMEN
Low correlation:GOV,INDP,CEODUL(-),BRDMEET(-)
REGRESSION ANALYSIS-ROE DEPENEDENCE
 REGRESSION ANALYSIS-ROE DEPENEDENCE
High correlations:ZSCORE,TEQT(-),TOTALAST
Medium correlations:WOMEN,BRDMEET(-),TOTSALES(-)
Low correlations:ENV(-),SOC,GOV,NWT,FCF(-)
REGRESSION ANALYSIS-TOBINQ DEPENEDENCE
 REGRESSION ANALYSIS-TOBINQ DEPENEDENCE
High correlation:
Medium correlation:ESG(-),ENV,CEODUL(-)
Low correlation:SOC,INDP,BRDSIZE
Correlation
REGRESSION ANALYSIS-ROA DEPENEDENCE
Banking: HSBC Holdings PLC, Lloyds Banking Group
PLC, Barclays PLC, Royal Bank of Scotland Group
PLC, Standard Chartered PLC
 REGRESSION ANALYSIS-ROA DEPENEDENCE
High correlations:NETIMP,NETPRF,GOV(-),BRDSIZE,NWT
Medium correlations:SOC,INDP(-),BRDMEETYR(-),FCF
Low correlations:ESG(-),BRDMEET
REGRESSION ANALYSIS-ROE DEPENEDENCE
 REGRESSION ANALYSIS-ROE DEPENEDENCE
High correlation:GRI, CSRSUST
Medium correlation:SALGWT, NETPRF
Low correlation:WOMEN(-),BRDMEET(-),CEOPAY, NETINM
REGRESSION ANALYSIS-TOBINQ DEPENEDENCE
 REGRESSION ANALYSIS-TOBINQ DEPENEDENCE
High correlation:NETPRF,NETIMP,GOV(-)
Medium correlation:BRDSIZE,DTE(-),TOTALEMP
Low correlations:CAPEXP(-),BRDMEET
Thank you