Green Finance and ESG Ratings : Their Impact on Investor confidence, Asset Valuation and Sustainable Invesment Decisions in Emerging Economies
Author(s): 1. Chhavi Pandey, 2.Vinay Pratap Suravanshi , 3.Akanksha Mishra, 4. Dr. Sneha Singh
Authors Affiliations:
1,2,3 Student, Department of Business Administration, Vindhya Institute of Technology and Science, Satna, MP
2Associate Professor, Department of Business Administration, Vindhya Group of Institutions, Satna, MP
DOIs:10.2015/IJIRMF/202610013 | Paper ID: IJIRMF202610013ESG rating disagreement and green washing risk do not merely weaken the ESG–valuation link in emerging markets — under high disagreement, high green washing risk, and weak institutional quality, they can jointly reverse its sign, so higher reported ESG scores become associated with a higher, not lower, cost of capital.
This is formalized as a dual-moderation, sign-switching model nested within a triple-interaction institutional-contingency framework, where institutional quality (disclosure-assurance strength) governs whether the sign-switching regime is reached at all. The question shifts from "are ESG effects weaker here?" to "under what institutional conditions does the ESG signal invert?"
The design proposes a quantitative panel centred on India, exploiting the staggered, market-cap-tiered rollout of SEBI's BRSR Core assurance mandate as a quasi-experiment, with other emerging markets used only for external-validity checks, via staggered-adoption-robust difference-in-differences and triple-interaction models. Identification threats — reverse causality, endogenous selection, ESG measurement error, and BRSR Core's bundled-policy nature — are addressed explicitly, and feasibility is shown via a literature-derived benchmark table and sample-power discussion rather than asserted. Findings would inform how SEBI, the RBI, and comparable regulators calibrate disclosure-assurance regimes, and how investors and issuers price ESG credibility rather than ESG level alone.
Chhavi Pandey and Dr. Sneha Singh (2026); Green Finance and ESG Ratings Their Impact on Investor Confidence, Asset Valuation, and Sustainable Investment Decisions in Emerging Economies, International Journal for Innovative Research in Multidisciplinary Field, ISSN(O): 2455-0620, Vol-12, Issue-10, Available on – https://www.ijirmf.com/
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