The Arthashastra and ESG Finance: Ancient Indian Insights for Responsible Wealth Creation

Abstract

Purpose: To explore the conceptual synergies between Kautilya's Arthashastra and modern Environmental, Social, and Governance (ESG) finance, and to establish that ancient Indian fiscal wisdom offers a timeless ethical framework for responsible and sustainable wealth creation. Methodology: The study adopts a qualitative, conceptual, and exploratory research design. Using an interpretive and analytical approach, it draws on standard scholarly translations of the Arthashastra and on peer-reviewed scholarship on ESG, corporate governance, sustainability, and ethical finance. Thematic analysis is used to derive and compare themes from both bodies of knowledge, and the resulting linkages are organised into a conceptual framework. Analysis: The paper analyses the governance, administrative, welfare, and resource-management prescriptions of the Arthashastra and maps them systematically against the three pillars of ESG. It examines Kautilya's mechanisms of accountability and anti-corruption control, his welfare-oriented economics, and his prescriptions for the sustainable use of land, water, and forests, comparing each with modern ESG theory and evidence. Results: The study finds that the Arthashastra constitutes a coherent 'proto-ESG' framework that predates and conceptually anticipates modern sustainability standards. Unlike modern ESG models, which frequently treat the three pillars as separate, Kautilya's approach integrates governance, social welfare, and environmental stewardship into a single, interdependent model of responsible statecraft and wealth creation. Originality/Value: The paper offers a culturally grounded, value-based foundation for ESG finance, demonstrating that ESG principles are not purely contemporary innovations but are rooted in enduring ethical traditions. It argues that integrating Arthashastra-inspired ethics into financial policy and corporate strategy can strengthen ESG compliance, reinforce stakeholder trust, and enhance long-term resilience. Type of Paper: Conceptual / Exploratory Analysis.