Abstract
This study evaluates the relationship between Environmental, Social, and Governance (ESG) performance and stock market performance among selected Indian companies across diverse sectors. Covered a ten-year period from FY 2016–17 to FY 2025–26, the research employed an analytical and quantitative design using secondary data collected from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Business Responsibility and Sustainability Reports (BRSR), and corporate disclosures. A sample of ten companies, encompassing high, moderate, and low ESG performers, was selected using a purposive sampling technique. The evaluation utilizes descriptive statistics alongside Pearson correlation and linear regression analysis to test the impact of ESG scores on average ten-year stock returns. The findings indicate a wide dispersion in ESG integration, with scores ranging from 35 to 80. Correlation analysis revealed a strong, statistically significant positive relationship ($r = 0.8072, p < 0.05$) between ESG performance and market returns. Furthermore, the linear regression model ($R^2 = 0.6516, F = 14.9621, p < 0.05$) indicates that ESG scores account for approximately 65.16% of the variance in long-term stock returns ($Y = -16.1034 + 0.5262X$). Diagnostic testing confirmed the normality of residuals (Shapiro–Wilk test, $p = 0.5888$), supporting model robustness. The results demonstrated that strong ESG commitments serve as a strategic advantage, enhancing investor confidence and market valuation. The study suggested that Indian corporations should embed ESG criteria into core business strategies, while regulatory bodies should continue standardizing sustainability disclosures.