An empirical study of supply chain sustainability with financial performances of Indian firms

In this research, we examine empirically the impact of sustainable supply chain practices on financial performances, considering the case of Indian firms. Here, we use a sample of 25 Indian firms listed for their sustainability performances in the Thomson Reuters Environmental, Social and Governance (ESG) scores. The sustainability performance data have been accessed from the Bloomberg terminal, where the overall sustainability performance on ESG is measured as a discounted score on ESG considering various controversies on ESG reported for the firm. And for the study, we associate financial data using the profit indicators of firms. We perceive that the sustainable supply chain practices considering environmental, social and governance performances may not positively impact the financial performance measured by the Return on Asset (ROA) and Return on Equity (ROE), during the considered period of five years for the study. We construct the empirical model and use Partial Least Square (PLS) regression modeling to analyze the results. The study can be further extended for many Indian firms and for firms across different developing economies, as well. The major implications of this research are to observe for firms and their supply chains whether the implementation of Environmental, Social and Governance (ESG) practices can help them in achieving financial benefits, along with other competitive advantages. The research is built on the concept and theory of ecological modernization, which suggests for the economic benefits of environmentalism.