Impact of Environmental, Social, and Governance (ESG) Disclosures on Firm Value: Study of 5 ASEAN Countries

Abstract

"Because stakeholders are becoming more aware of environmental, social, and governance issues, businesses today should focus on sustainability as a goal in addition to maximizing profits. This study examined 294 companies listed on the ESG Bloomberg index for four years to see how Environmental, Social, and Governance (ESG) Disclosure affects firm value in 5 ASEAN countries (2018-2021). Tobin’s Q is the dependent variable, while ESG Disclosure is the independent variable. Profitability, leverage, company size, GDP, and COVID-19 were employed as the study’s control variables. Although measuring ESG subcomponents separately demonstrated that the relationship between environmental and social disclosure and Tobin’s Q and governance disclosure is favorable, negatively to Tobin’s Q. This study has certain limitations due to the small number of businesses with ESG scores."