Digital Transformation as a Structural Driver of ESG Performance: Empirical Evidence from Indian Capital Markets
Digital transformation is increasingly a structural determinant of corporate sustainability strategies in emerging economies. This research investigates the impact of digitalization on Environmental, Social, and Governance (ESG) performance among Indian firms listed on the BSE 500 between 2022 and 2024. Utilizing a novel text-mining approach to quantify digital intensity followed by panel regression analysis, the study explores the mechanisms through which technological adoption enhances corporate accountability. The findings reveal a robust positive correlation between digital transformation and ESG outcomes, with the most significant impact observed within the governance dimension. This suggests that digitalization facilitates financial sustainability by reducing information asymmetry and enhancing regulatory compliance. The study provides critical insights for policymakers and investors in transitional economies regarding the strategic integration of digital reforms to achieve long-term ESG resilience.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 15th of October, 2025; Revised 29th of November, 2025; Accepted 11th of January, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
Sharma, M. & Radhika, R. (2026). Digital Transformation as a Structural Driver of ESG Performance: Empirical Evidence from Indian Capital Markets. Journal of Applied Economic Sciences, Volume XXI, Special issue, 1(91), 203– 215. https://doi.org/10.57017/jaes.v21.si.1(91).10
Acknowledgements/Funding: The authors received no financial assistance from any funding agency for the research and/or authorship of this article.
Conflict of Interest Statement: The authors declared no conflict of interest related to the publication and/or authorship of this study.
Data Availability Statement: The firm-level data used in this study were obtained from secondary data sources, including Prowess and Crisil. The text-mining scripts used for assessing digital transformation score are available from the corresponding author upon reasonable request. No conflicts of interest or external funding influenced data collection or analysis.
Ethical Approval Statement: Ethical approval was waived due to the use of secondary data sources and the retrospective nature of the study. All data used were either publicly available or derived using custom text-mining scripts, and no human participants were involved.
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