DOES CORPORATE ENVIRONMENTAL MANAGEMENT DISCLOSURES IMPROVE CORPORATE PERFORMANCE? EVIDENCE FROM FTSE 100 MALAYSIAN FIRMS

Foong, Wei Chee and Josephine Tan Hwang, Yau and Prihatnolo Gandhi, Amidjaya and Audrey, Liwan and Jerome Swee-Hui, Kueh (2022) DOES CORPORATE ENVIRONMENTAL MANAGEMENT DISCLOSURES IMPROVE CORPORATE PERFORMANCE? EVIDENCE FROM FTSE 100 MALAYSIAN FIRMS. Academy of Accounting and Financial Studies Journal, 26 (2). pp. 1-18. ISSN 1096-3685

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Abstract

This research paper aims to determine the linkage between corporate environmental management disclosure and firm financial performance by using the sample of top 100 public listed companies in Bursa Malaysia from the period 2012 to 2017. Therefore, the independent variables selected in this paper are corporate environmental management systems (CEM) which can further be classified as water management (WM), energy management (EM) and carbon management (CM). Meanwhile, the dependent variables are; return on equity (ROE), return on sales (ROS), return on investment (ROI), return on invested capital (ROIC) and capital intensity (CI). Besides that, firm characteristics have been added in this paper as control variables, namely; firm liquidity, size, leverage and age. All the data used in this paper were manually gathered from annual reports of respective companies and Thomson Reuters Eikon Database. The empirical analysis indicated that carbon management is significant to firm financial performance (ROE, ROIC). This might be due to the Malaysian government actively engaging in carbon emission reduction programmes; hence firms will be more aware and put more effort into carbon management. The findings recommended that the corporate environmental management disclosure should be one of the core concerns for shareholders, policymakers and investors.

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