AUTHORS:

Aditi Natasha Bhuinyan and Ayush Paul

ABSTRACT

This study evaluates the financial performance and crisis resilience of ESG-focused versus traditional equity
indices in India. Using daily data from April 2011 to December 2024, it compares the NIFTY ESG Index with the
NIFTY100 Traditional Index across cumulative returns, volatility, Sharpe ratios, and maximum drawdowns. The
analysis reveals that the ESG index consistently outperforms the traditional benchmark, delivering higher
cumulative and risk-adjusted returns while maintaining comparable or lower downside risk. During periods of
market stress, notably the COVID-19 pandemic, ESG investments demonstrated superior resilience, with lower
volatility, faster recovery, and stronger Sharpe ratios. These findings suggest that ESG integration enhances both
long-term financial performance and portfolio stability, challenging the notion that sustainable investing requires
sacrificing returns. The study provides robust empirical evidence that ESG considerations in India can
simultaneously support profitability, risk management, and sustainable growth, highlighting their strategic value
for investors, corporations, and policymakers seeking to align financial objectives with long-term sustainability
goals.