ISSN: 2265-6294

Is Being Good Valuable? Analysing the Effects of Environmental, Social, and Governance (ESG) Practises in Asian Countries.

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Nor Edi Azhar Mohamad,Noriza Mohd Saad,Fatihah Norazami Abdullah

Abstract

While making an investment decision, consider not just internal performance indicators such as sales growth, reduced leverage, or stable share price, but also integration components in environmental, social, and governance issues. In light of this, the study’s objective is to determine the impact of ESG factors on company performance as a benchmark for enterprise value in all Asian nations. Secondary data for dependent and independent variables was gathered from Bloomberg databases between 2014 and 2020. To achieve the goal, fixed and random effect models were tested, with the best-fit technique being used for the most appropriate model after testing for Hetero and Serial Correlation. The study reveals that the ESG disclosure of ES, GS, and SS, as well as the risk and size of the firm, are significant in predicting firm value. The firm’s leverage and liquidity, on the other hand, indicate insignificant results. According to the stakeholder theory, disclosing ESG information to all stakeholders is critical to improving a company’s long-term performance and gaining a strategic competitive advantage. The findings of this study can be utilised as a benchmarking tool to raise stakeholder value creation standards across Asian countries on the level of ESG practices, by comparing a firm’s performance to levels of socially responsible practices.

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