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Financial Performance as a Driver of ESG Disclosure: Evidence from Malaysia

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Listed:
  • Norhayati Sulaiman

    (Faculty of Accountancy, Universiti Teknologi MARA, Perak Branch, Tapah Campus, 35400, Tapah Road, Perak, Malaysia)

  • Sunarti Halid

    (Faculty of Accountancy, Universiti Teknologi MARA, Perak Branch, Tapah Campus, 35400, Tapah Road, Perak, Malaysia)

  • Noor Saatila Mohd Isa

    (Faculty of Accountancy, Universiti Teknologi MARA, Perak Branch, Tapah Campus, 35400, Tapah Road, Perak, Malaysia)

  • Norliana Omar

    (Faculty of Accountancy, Universiti Teknologi MARA, Perak Branch, Tapah Campus, 35400, Tapah Road, Perak, Malaysia)

  • Rahayu Abdul Rahman

    (Faculty of Accountancy, Universiti Teknologi MARA, Perak Branch, Tapah Campus, 35400, Tapah Road, Perak, Malaysia)

Abstract

This study explores the relationship between firm financial performance and Environmental, Social, and Governance (ESG) disclosure. Specifically, it examines three financial performance indicators: return on assets (ROA), return on equity (ROE), and market valuation (MV) to ESG disclosure. Based on 370 firm-year observations spanning 2012 to 2021, the findings reveal a positive and significant relationship between ESG disclosure and two financial performance proxies – ROA and MV. These results hold valuable implications for investors, policymakers, and relevant agencies, marking one of the first empirical studies on the impact of financial performance on the ESG scores of Malaysian listed firms. The study highlights the critical role of integrating ESG considerations into business strategies to achieve sustainable growth and promote a more transparent and responsible corporate environment.

Suggested Citation

  • Norhayati Sulaiman & Sunarti Halid & Noor Saatila Mohd Isa & Norliana Omar & Rahayu Abdul Rahman, 2025. "Financial Performance as a Driver of ESG Disclosure: Evidence from Malaysia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 3527-3534, January.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:1:p:3527-3534
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    References listed on IDEAS

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