ESG disclosure dynamics: assessing the impact of financial performance in Malaysian listed firms

This study aims to investigate the relationship between firm financial performance and Environmental, Social, and Governance (ESG) disclosure. In particular, this study examines three proxies of firm financial performance; return on assets, return on equity, and market valuation on ESG disclosure. Using 370 firmyear observations from 2012 to 2021, the results indicate a positive and significant association between two financial performance proxies; return on assets, market valuation and ESG disclosure. The outcomes of this study carry significance for investors, policymakers, and relevant agencies, representing one of the initial empirical investigations into the influence of financial performance on the ESG score of Malaysian listed firms. It underscores the importance of integrating ESG considerations into business strategies to achieve sustainable success and foster a more responsible and transparent business environment.