Connecting Sustainable Practices to Corporate Success: An Analysis of Nifty Pharma
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Abstract
This study examines the financial performance of Nifty Pharma firms from 2022 to 2024 in relation to sustainable practices. Using partial least squares (PLS) estimation, the analysis incorporates profit margin as a mediating variable to evaluate the influence of environmental factors on corporate performance, with a particular focus on return on assets (ROA). Data sourced from the Bloomberg database underpins the analysis, guided by clearly defined research objectives and hypotheses. Preliminary tests, including correlation analysis, descriptive statistics, and variance inflation factor (VIF) evaluation, were conducted to ensure robustness. Path analysis revealed that renewable energy significantly and positively influenced both profit margin and ROA, whereas overall greenhouse gas (GHG) emissions demonstrated a negative but negligible impact. Other environmental factors showed mild effects, though their significance remained limited. These findings underscore important considerations for senior management, emphasizing the benefits of reducing GHG emissions, embracing renewable energy, and adopting sustainable practices to improve profit margins and optimize ROA.