1Associate Professor in, Commerce, Sri Aurobindo College, University of Delhi
2Assistant Professor in, Management, USMS, GGS Indraprastha University, New Delhi
3Professor, Jagannath International Management Schoool, Kalkaji, New Delhi
Online published on 27 May, 2016.
Less polluting firms that employ green processes and follow better environmental policies have become preferred mode of investment asset class. The concern of businesses on environment is continuously being reflected in the long term focus and strategic planning. The primary aim of the present paper is to examine the relationship between environmental performance and financial performance of Indian companies that have been rated under Green Rating Project of Centre for Science and Environment from FY 2011 to FY 2015. The environmental performance is measured in terms of the ratings provided under the Green Rating Project while the financial performance is measured in terms of net profit margin. Regression analysis is performed on the data and the results show that higher score on the green index has a positive effect on financial performance for automobile and caustic chlorine and cement sectors. Also the firm's sensitivity towards the environment leads to better management of costs and lower monitoring costs, thereby increasing profits.
Environmental Policies, Strategic planning, Environmental Performance, Financial Performance
