Description of Invention
Environmental, social, and governance (ESG) criteria are used by most corporates to maintain the best management quality. Thus, implementing ESG criteria might assist firms in Malaysia to improve the corporate performance. The purpose of this research is to analyze the effect of ESG criteria on the corporate performance in terms of corporate value, and efficiency of Malaysian listed firms. Equally important, to strengthen the objective of this research, firm-specific variable such as firm size, sales growth and leverage will be included. A total of 551 firms are collected from Bursa Malaysia. However, only 45 companies are selected from Bloomberg's ESG database that has complete ESG scores data from 2011-2021. Corporate value will be measure by three indicators which are return on asset (ROA), return on equity (ROE) and Tobin's Q. Meanwhile, corporate efficiency will be measured by data envelopment analysis (DEA). This study conducted panel data regressions such as pooled OLS, fixed effect, and random effect. It was discovered that ESG scores, environmental scores, and social scores significantly increase corporate value. In the meantime, it was discovered that governance scores substantially enhance corporate efficacy. In terms of firm-specific variables, it was discovered that firm size, sales growth, and leverage significantly influence corporate values. However, leverage findings have an insignificant effect on corporate efficiency.