DOES ESG DRIVE ROA AND ROI RECOVERY IN DISTRESSED MALAYSIAN COMPANIES?

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides evidence on ESG-CFP link specifically for distressed firms, with a focus on governance.

🏢実務担当者:Distressed companies may consider leveraging governance improvements to attract investor confidence and aid recovery.

🏛政策担当者:Regulators in emerging markets could use these findings to encourage ESG adoption as part of turnaround frameworks.

Corporate financial performance (CFP) generally measures how a firm is effectively undertaking its profit-making activities, and the rising demands on companies by their stakeholders have resulted in a renewed emphasis on whether environmental, social, and governance (ESG) practices can be implemented to support financial performance, particularly in challenging environments. Firms that fall under the Practice Note 17 (PN17) and Guidance Note 3 (GN3) frameworks of Bursa Malaysia (BM) are under an increased level of scrutiny and pressure to recover, and thus, ESG–CFP relations are particularly applicable in the context of distress. This analysis was based on a sample of annual panels of PN17 and GN3 companies between 2015 and 2024, PN17/GN3 identification since 2001, and the datasets used in the research included BM, London Stock Exchange Group (LSEG) Workspace, annual reports, as well as websites of companies, with manual extraction of ESG data in the case of non-availability of third-party data. CFP was calculated by means of Return on Assets (ROA) and Return on Investment (ROI), while ESG was calculated by means of ESG scores and a composite ESG score, with control variables being company size, age, revenue growth, debt, shareholding by insiders, and board size. The empirical approach used fixed effects, pooled ordinary least squares, and random effects models as a product of diagnostic checks on the principles of normality, multicollinearity, heteroskedasticity, autocorrelation, and stationarity. The anticipated findings indicate that ESG practices have a positive relationship with CFP in distressed companies, and governance is expected to have the most proximate connection with performance through accountability and investor confidence. Meanwhile, the impact of environmental and social influences may be less apparent in the short term. In a nutshell, the results are targeted toward informing regulators, investors, and distressed companies on ESG representations and highlighting ESG aspects as recovery mechanisms.

• semanticscholar https://gaexcellence.com/aijbes/article/download/7328/6579first seen 2026-07-18 08:10:35