Materiality in sustainability disclosures and investment portfolio performance in the Indian context

Suveera Gill, Manika Kohli and Purnima Satija

Journal of Sustainable Finance & Investment, 2025, vol. 15, issue 3, 757-779

Abstract: Premised on the notion that not all sustainable issues are equally relevant to all industries, the study provides early empirical evidence of the value implications of sustainable material and immaterial investments in the Indian context. The study sample consists of 203 listed companies on the S&P BSE 500 Index across eleven sectors. Materiality and immateriality indices were constructed, and a portfolio-level analysis was carried out by measuring a one-year-ahead abnormal stock return portfolio performance using a calendar-time portfolio approach. The econometric results show that companies that ranked lower on material and immaterial sustainability disclosure scores outperformed those with higher scores. Similarly, a portfolio constructed with a higher immaterial score has a negative abnormal return. Further, sustainability disclosure scores are not superior predictors of future financial performance. The present results offer an insight into the material variability of the sustainability issues and their concomitant effect on investment portfolio performance.

Date: 2025
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DOI: 10.1080/20430795.2022.2086844

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