How does the Environment, Social, and Governance (ESG) Influence Shariah-compliant Companies' Performance?

Authors

  • Masturah Ma'in Department of Economics and Financial Studies, Faculty of Business and Management, Universiti Teknologi MARA, 42300 Puncak Alam, Selangor, Malaysia
  • Nurul Sabrina Nazhan Nazaiful Affendi Department of Law Amendment & Interim Merger Unit, Malaysia Competition Commission (MyCC), Menara SSM @Sentral, 50623, Kuala Lumpur, Malaysia
  • Mohamad Idham Md Razak Department of Economics and Financial Studies, Faculty of Business and Management, Universiti Teknologi MARA, 42300 Puncak Alam, Selangor, Malaysia
  • Akhmad Akbar Susamto Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada, Depok, Sleman, DI Yogyakarta, 55281, Indonesia

DOI:

https://doi.org/10.21834/e-bpj.v10i31.6583

Abstract

This study examines the performance of Malaysian Shariah-listed companies by analyzing their environment, social, and governance (ESG) from 2010 to 2021. Data were sourced from annual reports, the Bursa Malaysia 2022 Shariah securities list, and Thomson Reuters. A panel data analysis tested the impact of ESG, size, and leverage on performance. ESG had no significant effect on market performance (Tobin’s Q). From an accounting perspective (ROA), the environment had the most significant impact, followed by size and leverage. Companies should assess environmental policies, workplace social factors, and governance through transparency and leadership practices.

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Published

2025-01-31

How to Cite

Ma’in, M., Nazaiful Affendi, N. S. N., Md Razak, M. I., & Susamto, A. A. (2025). How does the Environment, Social, and Governance (ESG) Influence Shariah-compliant Companies’ Performance?. Environment-Behaviour Proceedings Journal, 10(31), 29–35. https://doi.org/10.21834/e-bpj.v10i31.6583

Issue

Section

Commercial / Retail / Services Environment