ESG PERFORMANCE, CARBON DISCLOSURE QUALITY, CARBON COMMITMENT, VOLUNTARY DISCLOSURE AND GREENWASHING: EVIDENCE FROM LISTED COMPANIES

Abstract

This dissertation investigates whether the quality, commitment, and voluntarism of sustainability disclosure by listed Indian companies—as mandated under the Business Responsibility and Sustainability Report (BRSR) framework—genuinely reflect environmental performance, or whether it constitutes a form of symbolic reporting that masks operational inaction, a phenomenon widely characterised as greenwashing. Three original measurement instruments are developed from BRSR-mandated corporate filings: the Disclosure Quality Index (DQI), a five-dimension composite covering breadth, depth, quantitative substance, implementation evidence, and governance credibility, weighted using Shannon entropy to address the saturation problem endemic to existing binary disclosure measures; the Carbon Commitment Index (CCI), which captures the formal architecture of climate compliance through environmental impact assessment, risk governance, and regulatory conformance disclosures; and the Voluntary Disclosure Index (VDI), which measures the degree to which firms exceed the mandatory reporting floor. The analytical sample comprises 744 de-duplicated firm-year observations drawn from FY2025 BRSR filings of NSE-listed Indian companies spanning 14 sector groupings. All three indices are subjected to standard psychometric and convergent validity tests. The dissertation then develops a Greenwashing Index by cross-referencing index scores against independently observed emission intensity. It assigns each firm to one of six descriptive categories—ranging from Genuine Sustainability Leaders through Transparent Performers and Commitment Leaders to Symbolic Reporters, Potential Greenwashers, and Severe Greenwashers. Empirical results, estimated using median (least-absolute-deviations) regression, Huber-robust regression, and OLS with heteroskedasticity-consistent standard errors on 716 complete-emission observations, yield four principal findings. First, the DQI is positively and significantly associated with emission intensity (DQI_noD3: β = +1.70, p < 0.001), indicating that higher disclosure quality is correlated with higher— not lower—carbon performance, consistent with the legitimacy-theory prediction that high-emitting firms invest disproportionately in disclosure form. Second, the CCI is negatively associated with emission intensity in both Huber and median regressions (β = −0.226, p < 0.001), suggesting that firms with more robust climate-compliance governance achieve lower emission intensity once the scale effect of absolute emissions is removed. Third, the VDI exhibits a flat, non-significant relationship with emissions, reflecting widespread saturation at the mandatory compliance ceiling. Fourth, the quadrant classification identifies 265 of 716 firms (37.0 per cent) as Greenwashers—a proportion materially and statistically above the 25 per cent random benchmark—while only 149 firms (20.8 per cent) qualify as Substantive disclosers whose reported quality is matched by genuine environmental performance. The findings extend the symbolic-disclosure framework and the legitimacy management literature to a mandatory disclosure regime in an emerging economy, and generate actionable implications for SEBI regulators, ESG ratings agencies, and institutional investors.