Firm characteristics and environmental performance: Evidence from ASEAN-5 countries

Abstract

Issues regarding environmental performance have become important recently. Moreover, after the Paris Agreement, it encouraged global attention to desire and responsibility for the environment. This issue puts pressure on companies to carry out their business activities responsibly so that they can report environmental performance well as a form of legitimacy. This research examines company characteristic factors, especially firm profitability, firm size, and firm size, which can influence environmental performance in five Southeast Asian countries: Indonesia, Singapore, Malaysia, Thailand, and the Philippines—using unbalanced panel data of 748 companies from 2013 to 2022, from Thomson Reuters. The research results show that the three company characteristics, size, and age, show significant positive results. This means that the bigger or longer the company has been around, the better its environmental performance. Meanwhile, company profitability produces significant negative results. The more companies focused on gaining profits, the lower their environmental performance. When companies focus on increasing their profits, they tend to neglect and avoid environmental performance because of the costs it causes. The research findings are expected to provide input for companies and governments to determine effective policies between business organizations and environmental performance integration within them.