Comparative Analysis of Environmental, Social, and Governance (ESG) Ratings with a Focus on Environmental Performance Among Banks and NBFCs: Insights from CRISIL ESG Scoring
Keywords:
ESG Ratings, Environmental, Social, and Governance, Sustainable Finance, CRISIL ESG Score, Banks, NBFCs, Green Finance, Climate Risk, Regulatory ComplianceAbstract
Environmental, Social, and Governance (ESG) ratings have emerged as a crucial measure of corporate
sustainability and responsible investing. In India, financial institutions, including banks and Non-Banking Financial
Companies (NBFCs), are increasingly being assessed for their ESG performance, driven by regulatory mandates and
investor preferences. This study conducts a comparative analysis of ESG ratings among Indian banks and NBFCs,
using CRISIL’s ESG scoring framework. The paper examines the environmental impact, social responsibility, and
governance structures of these institutions and evaluates the differences in ESG adoption between banks and
Environmental, Social, and Governance (ESG) ratings have emerged as a crucial measure of corporate sustainability and responsible investing. In India, financial institutions, including banks and Non-Banking Financial Companies (NBFCs), are increasingly being assessed for their ESG performance, driven by regulatory mandates and investor preferences. This study conducts a comparative analysis of ESG ratings among Indian banks and NBFCs, using CRISIL’s ESG scoring framework. The paper examines the environmental impact, social responsibility, and governance structures of these institutions and evaluates the differences in ESG adoption between banks and NBFCs. Additionally, it explores the regulatory landscape, challenges, and opportunities in ESG implementation. Using SPSS-based statistical analysis, including descriptive statistics, t-tests, and regression analysis, the study identifies key factors influencing ESG performance. The findings highlight that banks tend to have higher ESG ratings than NBFCs due to stricter regulatory compliance and better governance practices. However, with increasing investor demand for sustainability, NBFCs are gradually integrating ESG principles. The study underscores the need for standardized ESG disclosures, enhanced regulatory frameworks, and sustainable financial strategies to improve the overall ESG performance of Indian financial institutions.
