WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 21, 2024
Effect on Environmental, Social and Governance (ESG) Criteria on the Firm Profitability of Listed Companies in Malaysia
Authors: , ,
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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Keywords: Environmental, Governance and Social (ESG), firm profitability, ROA, ROE, firm size, leverage
Pages: 239-247
DOI: 10.37394/23207.2024.21.22