The impact of ESG ratings on the firm performance of listed companies in the ASEAN-5

• Main Authors: Abaniel, Arvin Marion Barroga, Domingo, Sophia-anne Marie Lavarez, Jarin, Mike Alvinjay Ramos, Villanueva, Josef Marcelus Igle
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Corporations—Finance—Environmental aspects; Sustainability; Sustainable development; Social responsibility of business; Accounting; Business Law, Public Responsibility, and Ethics; Management Sciences and Quantitative Methods
• Online Access: https://animorepository.dlsu.edu.ph/etdb_acc/22; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1060&context=etdb_acc
• Institution: De La Salle University

Businesses are generally thought of as profit-oriented entities. However, a number of investors have become more aware about the rampant social and environmental problems that the world has been facing that they demanded companies to do sustainability efforts, relating to the environment, social, and governance (ESG) pillars. Over the years, ESG has grown and has been a focus of various studies; yet no conclusive evidence has been found due to differing results obtained. Nonetheless, ESG performance carries a potential to serve as an edge of firms in today’s competitive market. With this, the study aimed to determine the impact of ESG on the firm performance of listed companies in the ASEAN-5 in terms of financial performance, firm value, and stock performance. The ESG scores and firm performance data of a total enumeration of 170 firms were retrieved from Thomson Reuters (Refinitiv Eikon) and analyzed using panel data analysis to determine whether ESG has a significant impact on the variables. This study found that Composite ESG Performance has a significant negative impact on Financial Performance, and that Environmental Pillar Performance has a significant positive impact on Stock Performance. Ultimately, the study concluded that ESG Performance has no significant impact on Firm Performance. Relevant recommendations for publicly-listed companies, investors, regulators, the academe, and future researchers were also provided.