The purpose of this paper is to identify the level of disclosure based on different regulatory requirements on Environmental, Social and Governance (ESG) information while exploring its effect on the firm's performance comparatively between Malaysia an emerging economy and Denmark as a benchmark of good practice. Top 100 largest companies listed each in Bursa Malaysia and Nasdaq OMX Copenhagen are selected. Content analysis on companies' annual report and stand-alone reports produced in 2013 is carried out using a modified ESG disclosure index based on prior studies and established global standards. A one year lag consideration is used on firm's performance. A significant difference was found on the ESG disclosure level between countries and different ESG element is being emphasized by each countries. However, the finding was not as expected, even though legislative pressure does exist in Denmark, it fail to prove that disclosure in Denmark is higher or more comprehensive than Malaysia, a country without any specific requisite on ESG. No association was found between ESG disclosure level and firm's financial performance. This study provides the evidence that there is significant influence of the country's regulatory background on the firm's ESG disclosure level. This has an important implication for Bursa Malaysia's policy with the recent introduction of FTSE4Good ESG Index in Dec 2014 by the stock exchange that would be an advantage for Malaysian market to attract the social responsible investors around the world.
Kweh, Q. L., Alrazi, B., Chan, Y. C., & Wan Abdullah, W. M. T. (2017). The Effects of Environmental, Social and Governance on the Corporate Performance of Malaysian Government-Linked Companies. SHS Web of Conferences, 36, 00022. https://doi.org/10.1051/shsconf/20173600022