Title: The influence of environmental, social, governance factors and firm performance on the sustainable reporting of Malaysian companies

Authors: Nor Faezah Abdullah Sani; Ruhaini Muda; Roshayani Arshad; Ramesh Nair

Addresses: Faculty of Business and Management, Universiti Teknologi MARA, 40450 Selangor, Malaysia ' Accounting Research Institute, Faculty Business and Management, Universiti Teknologi MARA, 40450 Selangor, Malaysia ' Accounting Research Institute, Universiti Teknologi MARA, 40450 Selangor, Malaysia ' Accounting Research Institute, Universiti Teknologi MARA, 40450 Selangor, Malaysia

Abstract: Sustainability reporting is essential to demonstrate commitment, transparency, and competitive advantage. This study aims to assess the relationship between environmental, social and governance (ESG) factors and firm performance by using firm value (i.e., Tobin's Q) and firm profitability (ROA), and to what extent the practice of continuously and voluntarily disclosures sustainability activities impacts firm performance. This study utilises the dataset of 47 companies that were listed on the FTSE4G Bursa Malaysia from 2014 to 2017. The findings indicate that there is no significant relationship between ESG factors and firm value as well as firm profitability of companies that continuously issued sustainability reports. However, the result reveals that there is a significant and positive relationship between ESG factors and firm value for companies that continuously listed on the FTSE4G Bursa Malaysia. This implies that the companies have gained a good reputation and competitive advantage, regardless of whether they issued sustainability reports annually. The outcomes of this study will be useful for the sustainable reporting of Malaysian companies.

Keywords: ESG; environmental social governance; sustainability reporting; voluntary disclosures; firm performance; firm value; FTSE4G Bursa Malaysia.

DOI: 10.1504/IJEBR.2020.111100

International Journal of Economics and Business Research, 2020 Vol.20 No.4, pp.407 - 424

Received: 16 Sep 2019
Accepted: 06 Dec 2019

Published online: 21 Oct 2020 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article