Do Environmental, Social and Corporate Governance Practices Enhance Malaysian Public-Listed Companies Performance?

Abstract

This study examines whether there is a positive relationship between Environmental, Social and Governance (ESG) disclosure and financial performance, as measured by Tobin’s Q. Using a sample of 59 listed firms under the FTSE4Good Bursa Malaysia (F4GBM) Index from 2014 to 2021, our panel regression analyses show: First, ESG has a significant positive impact on company performance. Second, Social Disclosure (SOC) positively impacts financial performance. As a policy suggestion, the government must have a complete mechanism to monitor and promote the ESG blueprint. In addition, the government should develop programmes that are pro-ESG by giving tax exemption to firms that implement ESG strategies, for example, increasing the publicity of the Green Investment Tax Credit (GITA) to promote the development of green technology in Malaysia.