ESG RATING AND FIRM PERFORMANCE: COMPARISON AMONG SINGAPORE, MALAYSIA, BRUNEI, INDONESIA AND THAILAND

Abstract

In recent years, environmental, social and governance (ESG) factors is becoming part of the company’s mainstream investing and this investment has emerged as an important aspect to the institutional investors and the companies This study is a conceptual framework to explore the potential benefits of examining the relationship between ESG Rating and firm performance. The study will focus on ASEAN-5 (i.e., Singapore, Malaysia, Brunei, Indonesia and Thailand), which are having the highest GDP in this region. Potential public listed firms with ESG reporting will be retrieved from the DataStream of Thomson Reutersâ€ASSET4, and return on assets (ROA) and Tobin’s Q will be used as measurements for firm performance. This study aims to provide insight to companies on the financial effect of ESG disclosure on firm performance in different nations, which can be used by firms, and governments to determine whether they should disclose and invest in ESG reporting. In addition, these results can provide useful information to investors in determining whether they should invest in an ESG disclosure or non-disclosure firm, and how this differs in each country. Governments also can use this information when they want to perform asset investment locally or in other ASEAN nations.