The Effects of Environmental, Social and Governance on the Corporate Performance of Malaysian Government-Linked Companies

Abstract

This study examines the impacts of ESG on the corporate performance government-linked companies (GLCs) in Malaysia. For the period 2006-2012, ESG disclosure data were extracted from the Sustainalytics ESG performance reports, while financial data were obtained from the Bloomberg database. Data development analysis (DEA) was used to estimate efficiency in the first stage; a regression analysis was performed to test the relationship between ESG and efficiency in the second stage. The empirical results of this study show that GLCs focused more on governance disclosures, followed by social and environmental aspects. Moreover, governance will improve firm efficiency, but social and environmental factors have no similar effect. In conclusion, this study provides insight on the limited literature on ESG and informs the relevant stakeholders on the important ESG components for financial and investment decisions.

The Effect of ESG Performance on Economic Performance in the High Profile Industry in Indonesia

“…Previous researchers that found a positive influence between ESG performance on economic were Ferreroferrero et al, (2016), Signes, Ona, Jimenez, & Vargas (2013), Michelon, Boesso, & Kumar (2013), Roman, Hayibor, &Agle (1999), Simpson & Kohers (2002), Orlitzky, Schmidt, Rynes, &Rynes (2000), and Al-tuwaijri& Ii (2003). Meanwhile, studies that found negative results were Crisostomo, Freire, & Vasconcellos (2011).Other studies from Tarmuji, Maelah, & Tarmuji(2016), Dahlberg & Wiklund (2018), Waworuntu, Wantah, & Rusmanto (2014), Long, Bakhtiar, Chuann, Abdullah, & Mohammad (2017), and Velte (2018) found mixed results with the different object and variables.…”

Environmental, Social and Governance Disclosures on Financial Performance of Public Listed Companies in Malaysia

“…Annual reports for the year 2019 of the sample companies were chosen as secondary data information for data collection purposes. The extent of disclosures made through annual reports can be considered for this study as there were many previous studies which used annual reports as a channel for information (Ahmad, Hassan, & Mohammad, 2003;Kweh et al, 2017;Haniffa & Cooke, 2005;Mohd Ghazali, 2007;Atan et al, 2016).…”

“…These three main dimensions help measure not only financial performance but also future performance of corporations. Past studies have shown that different corporations have different strategies to outfit for ESG disclosures, giving an impact towards financial performance (Friede, Busch, & Bassen, 2015;Ruhaya, Razali, Said, & Zainon, 2016;Kweh, Alrazi, Chan, Abdullah, & Lee, 2017;Tze et al, 2016;Zhao, 2018). The results are inconclusive as they are mixed between positive and contradictory.…”

The Environmental Sustainability Reporting Among Malaysia Best-Governed Companies

“…In the past, especially in the context of Malaysia as one of the high performing emerging economies with GDP per capita growth of more than 3.5% annually https: //doi.org/10.15405/epsbs.2020.12.05.29 Corresponding Author: Bakhtiar Alrazi Selection and peer-review under Sulaiman et al (2014), Said et al (2013), Alrazi et al (2009), Buniamin et al (2008), Sumiani et al (2007), and Ahmad et al (2003), to name but a few. Recently, there was a shift from researching on environmental reporting to broader sustainability reporting (Amran et al, 2014;Amran & Haniffa, 2011;Sawani et al, 2010) or environmental, social and governance (ESG) reporting (Kweh et al, 2017). Furthermore, there has also become a trend to examine a rather more specific environmental issues including climate change (e.g., Alrazi, 2014;Amran et al, 2012;Kalu et al, 2016;Ooi & Amran, 2018;Omar & Amran, 2017), water and biodiversity (Mat Husin et al, 2018a, 2018b.…”