Abstract
This paper analyzes the effect of ESG criteria on the firm profitability among Malaysian listed firms. Firm-specific variables such as firm size, revenue growth, and leverage were also included in the analysis. A total of 42 companies from Bursa Malaysia are selected from Bloomberg’s database that has complete ESG scores data from 2011-2021. Firm profitability was measured using ROA and ROE. Using panel data analysis, this study found that ESG scores have a significant positive influence on firm profitability. Meanwhile, Social Score individually has a significant negative impact on firm profitability. Individual Environment and Governance scores do not have a significant relationship with firm profitability. Leverage and firm size significantly negatively affect firm profitability.
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