Green Process Innovation Reflecting Corporate Sustainability and Financial Performance: Malaysian Public Listed Companies

Environmental, social, and governance (ESG) is part of the companies’ practices safeguarding the non-economical mandatory for the seek of stakeholders’ interest. Most of Malaysian companies had still not allocated a budget for sustainability initiatives, with some of them claiming a lack of sustainable financing plans. This study explores the relationship between ESG practices and financial performance among Malaysian public-listed companies (PLCs). Corporate sustainability, involving environmental, social, and governance balance, has gained significance in achieving sustainable development. The study analyses data from the top 100 Malaysian PLCs between 2019 and 2021, employing ESG disclosure and financial performance metrics. The findings reveal a positive impact of ESG practices on financial performance, supporting prior research. Employing quantile regression, the study addresses non-normality and variations across the performance spectrum. The results indicate that larger companies demonstrate positive links between ESG disclosure and accounting performance, while market-based performance benefits from specific ESG indices. As the large corporations have a wide coverage globally, material sustainability disclosures able to provide real-time insights and efficient sustainability goals using the IoT. This research contributes to the growing body of knowledge on ESG and financial performance dynamics, offering insights for investors, policymakers, and business leaders. Recommendation for the future study of having the different sector ESG reporting by looking into the main sector contributes to the practices.