THE EFFECT OF ESG PERFORMANCE ON THAILAND LISTED FIRMS' FINANCIAL PERFORMANCE: EVIDENCE FROM SET50 LISTED COMPANIES

• Main Author: Heinrich, Andrew
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/82961
• Institution: Institut Teknologi Bandung

Global concerns about long-term sustainability have been increasing, particularly within the corporate landscape. This has led countries worldwide to enhance their ESG frameworks through various initiatives. However, companies remain uncertain whether integrating ESG principles into their business practices will positively affect financial performance, given the mixed results in existing literature. Additionally, studies conducted in emerging economies are still limited compared to those in developed countries, largely due to a generally lower emphasis on sustainability. This research aims to analyze how ESG performance affects the financial performance of companies in Thailand, which despite being an emerging economy country, has been substantially strengthening its ESG landscape. The study focuses on publicly listed companies in the SET50 Index, utilizing ESG ratings from MSCI for the period of 2019 to 2022. Meanwhile, a one-year lag is applied for financial performance, with companies' ROA collected from 2020 to 2023 as the proxy. This research employs a Panel Data Regression to analyze the data. The results indicate that ESG performance positively affects the financial performance of SET50 companies, suggesting that Thailand has made substantial progress in strengthening its ESG landscape compared to other emerging economy countries. Furthermore, sub-sampling the companies into different risk groups reveals that ESG performance only affects the financial performance in high-risk companies. This underscores a particularly high urgency for high-risk companies to enhance their ESG performance to improve long-term financial performance.