ESG Driven Profitability: Does Gender Diversity Explain Heterogeneity Among Firms in BRICS Economies

Abstract

This paper explores the relationship between the Environmental, Social, and Governance (ESG) performance and the financial performance of companies and consider how gender diversity can moderate this relationship. The paper analyses the information of BRICS countries in top listed companies with the help of panel regression analysis. The results indicate that the effectiveness of ESG performance has a negligible effect on the Return on Equity (ROE), which implies that sustainability efforts do not directly result in the financial benefits in the short term in this setting. Also leverage has been found to have a negative relationship with ROE, with firm age showing a positive relationship, which suggests that older firms have a better financial performance. The results contribute to the existing literature and provides valuable insights for policymakers and corporate decision-makers aiming to balance sustainability objectives with financial outcomes.