ENVIRONMENTAL, SOCIAL, AND GOVERNANCE SCORE INFLUENCE ON FIRM PERFORMANCE AMIDST INDONESIA-MALAYSIA-THAILAND GROWTH TRIANGLE LISTED COMPANIES

Abstract

Environmental, Social, and Governance (ESG) scores have been widely explored regarding their role on firm performance, yet few studies have examined their significance from a regional perspective. This research addresses this gap by analyzing the comprehensive impact of ESG scores within Indonesia, Malaysia, and Thailand. Guided by stakeholder-agency theory, which posits that higher ESG scores lead to improved firm performance, the study employs secondary data, including ESG scores from S&P Capital IQ Pro and firm performance measured by return on assets (ROA). Using a quantitative approach, the findings reveal that average ESG scores vary across the observations, with Thailand scoring highest (40.698), followed by Malaysia (25.032), and Indonesia (20.984). The results indicate a significant positive relationship between ESG scores and firm performance. Moreover, business risk, firm size, and growth rate, are found to exert a strong influence on firm performance, further emphasizing the importance of firm-specific characteristics alongside ESG practices in shaping corporate outcomes.