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Sustainability Reporting and Financial Performance of Malaysian Public Listed Companies

Author

Listed:
  • Nur Fatin Kasbun

    (Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia)

  • Boon Heng Teh

    (Unit Finance, Faculty of Management, Multimedia University Malaysia)

  • Tze San Ong

    (Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia)

Abstract

Sustainability reporting has become increasingly common in recent years for companies across the globe. It is seen as an approach that can integrate and balance the performance of a business’ economic, environmental and social dimensions. The main issue now is not solely about complying with the mandatory rules or ensuring the company’s reputations, but sustainability to promote efficiency in business and improve productivity. Although sustainability reporting is not a new concept, its implementation is still unsystematic. Management, it appears, is not convinced on the importance of sustainability reporting due to high costs and difficulty of measurements. These have resulted in ignorance, negligence and unsystematic nature of economic, social and environmental reportage on sustainability in Malaysia. Reporting percentage in Malaysia remains very low despite it being ranked the highest in Southeast Asia. Despite the rise in the sustainability reporting globally, there is limited academic research on sustainability reporting in Malaysia while conventional accounting practices somewhat reduced the need for sustainability reporting. This research investigates the relationship between sustainability reporting and financial performance of Malaysian Public Listed Companies. In the summary of findings, the regression results suggest that economic, social and environmental sustainability reporting is positively associated with financial performance measured using Return on Assets and Return on Equity.

Suggested Citation

  • Nur Fatin Kasbun & Boon Heng Teh & Tze San Ong, 2016. "Sustainability Reporting and Financial Performance of Malaysian Public Listed Companies," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 8(4), pages 78-93, October.
    • Handle: RePEc:umk:journl:v:8:y:2016:i:4:p:78-93
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    Citations

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    Cited by:

    1. Nagalingam Nagendrakumar & Kalubowilage Navodya Nilupulee Alwis & Udage Arachchige Kaveesha Eshani & Seekku Baduge Ushani Kaushalya, 2022. "The Impact of Sustainability Practices on the Going Concern of the Travel and Tourism Industry: Evidence from Developed and Developing Countries," Sustainability, MDPI, vol. 14(24), pages 1-21, December.
    2. Mesut Doğan & Mustafa Kevser, 2021. "Relationship Between Sustainability Report, Financial Performance, and Ownership Structure: Research on The Turkish Banking Sector," Istanbul Business Research, Istanbul University Business School, vol. 50(1), pages 77-102, May.
    3. Siti Indati MUSTAPA & Noor Raida ABD RAHMAN & Amar Hisham JAAFFAR & Nor Salwati OTHMAN & Syarifah Mardhiah Syed SALIM, 2024. "Policy Recommendation to Achieve a Carbon-Neutral Economy: The Case of Corporate Governance and Carbon Performance in Malaysia's Smart Cities," Working Papers DP-2024-21, Economic Research Institute for ASEAN and East Asia (ERIA).
    4. Begüm Güler & Füsun Küçükbay, 2022. "Does Inclusion in the Sustainability Index Contribute to the Financial Performance of the Companies: Evidence from Developing Countries," Journal of Economy Culture and Society, Istanbul University, Faculty of Economics, vol. 66(66), pages 307-317, December.
    5. Noor Azuddin Yakob & Norraidah Abu Hasan, 2021. "Exploring the Interaction Effects of Board Meetings on Information Disclosure and Financial Performance in Public Listed Companies," Economies, MDPI, vol. 9(4), pages 1-11, September.
    6. Chen Anqi & Ong Tze San, 2022. "Environmental Performance, Corporate Governance and Financial Performance of Chinese Heavy Polluted Industries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 460-469, May.

    More about this item

    Keywords

    Economic disclosures; environmental disclosures; return on assets; return on equity; social disclosures; sustaiability reporting; Malaysia;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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