THE EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) DISCLOSURE AND SHARIAH-COMPLIANCE ON FIRM PERFORMANCE AMONG LISTED FIRMS IN MALAYSIA

Authors

  • Nik Nur Farahiyah Nik Asni Faculty of Accountancy, UiTM Cawangan Johor Kampus Segamat
  • Nurul Azlin Azmi Faculty of Accountancy, UiTM Cawangan Johor Kampus Segamat
  • Raja Adzrin Raja Ahmad Faculty of Accountancy, UiTM Cawangan Johor Kampus Segamat

Keywords:

Environmental, Social, and Governance (ESG), firm performance, Shariah-compliance

Abstract

This study aims to examine the effect of environmental, social, and governance (ESG) disclosure and Shariah-compliance status on firm performance and if the relationship between ESG disclosure and firm performance is moderated by Shariah-compliance status. Data were sourced from Eikon DataStream on ESG disclosure and firm performance from the period of 2020-2023. Shariah compliance status was hand-collected from the Securities Commission Malaysia’s website. This study employs a regression model to test the hypotheses. We identify a significant positive relationship between ESG disclosure and Shariah-compliance status on firm performance. Additionally, the results also found that Shariah-compliance status strengthens the positive relationship between ESG disclosure and firm performance. Our study contributes to the understanding of stakeholders, authorities, decision-makers, and academics regarding how ESG disclosure affects a firm's performance. These results also gave investors more insight into the importance of ESG considerations when making investment decisions for Shariah-compliance firms. The results, which corroborate the link between ESG disclosure and improved firm performance, ought to motivate managers to invest in ESG practices.



Author Biography

Nurul Azlin Azmi, Faculty of Accountancy, UiTM Cawangan Johor Kampus Segamat

Nurul Azlin Azmi joined UiTM in June 2010 as an Accounting Lecturer in the Faculty of Accountancy. She received her Ph.D. (Financial Criminology) from Universiti Teknologi MARA in 2021. She was awarded with Graduate on Time (GOT) and Excellent Research Award (APC) for her Ph.D. She received her Bachelor of Accountancy (Hons) from Universiti Utara Malaysia in 2008 and Master of Business Administration (Accounting) from Universiti Utara Malaysia in 2010. While completing her master's degree, she worked as an Audit Assistant at AljeffriDean Chartered Accountant (M) in 2009. Then, she joined Stamford College Malacca as a lecturer in December 2009. Her research interests are in the area of political connection, auditing, earnings quality, and corporate governance.

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Published

2024-10-03

Issue

Vol. 11 No. 2 (2024): Volume 11 Issue 2

Section

ACCOUNTING