Does environmental, social and governance (ESG) performance increase earnings informativeness? Evidence from ASEAN countries

Khalid Ardhi Nurrahman; Aria Farah Mita

doi:10.1504/IJTGM.2022.124080

Does environmental, social and governance (ESG) performance increase earnings informativeness? Evidence from ASEAN countries

Khalid Ardhi Nurrahman, Aria Farah Mita

Department of Accounting

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

This study aims to analyse the effect of corporate sustainability performance on earnings informativeness. The sustainability performance measured by the environmental, social and governance (ESG) disclosures is expected to improve the earnings informativeness. This study was conducted on 97 companies which have ESG score from Thomson Reuters for the period of 2012 to 2016 in ASEAN-5 countries: Indonesia, Malaysia, Philippines, Singapore, and Thailand. This study finds that ESG disclosures increase earnings informativeness. Company’s with higher ESG score reflects higher earnings informativeness and the higher earnings informativeness reduces the information asymmetry. The ESG disclosures in ASEAN countries now are still voluntary. This study implies that the regulators in ASEAN shall consider the benefits of ESG disclosure for investors.

Original language	English
Pages (from-to)	363-376
Number of pages	14
Journal	International Journal of Trade and Global Markets
Volume	15
Issue number	3
DOIs	https://doi.org/10.1504/IJTGM.2022.124080
Publication status	Published - 2022

Keywords

ASEAN countries
disclosures
earnings informativeness
environment
ESG
governance
information asymmetry
social
sustainability performance

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1504/IJTGM.2022.124080

Cite this

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abstract = "This study aims to analyse the effect of corporate sustainability performance on earnings informativeness. The sustainability performance measured by the environmental, social and governance (ESG) disclosures is expected to improve the earnings informativeness. This study was conducted on 97 companies which have ESG score from Thomson Reuters for the period of 2012 to 2016 in ASEAN-5 countries: Indonesia, Malaysia, Philippines, Singapore, and Thailand. This study finds that ESG disclosures increase earnings informativeness. Company{\textquoteright}s with higher ESG score reflects higher earnings informativeness and the higher earnings informativeness reduces the information asymmetry. The ESG disclosures in ASEAN countries now are still voluntary. This study implies that the regulators in ASEAN shall consider the benefits of ESG disclosure for investors.",

keywords = "ASEAN countries, disclosures, earnings informativeness, environment, ESG, governance, information asymmetry, social, sustainability performance",

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AB - This study aims to analyse the effect of corporate sustainability performance on earnings informativeness. The sustainability performance measured by the environmental, social and governance (ESG) disclosures is expected to improve the earnings informativeness. This study was conducted on 97 companies which have ESG score from Thomson Reuters for the period of 2012 to 2016 in ASEAN-5 countries: Indonesia, Malaysia, Philippines, Singapore, and Thailand. This study finds that ESG disclosures increase earnings informativeness. Company’s with higher ESG score reflects higher earnings informativeness and the higher earnings informativeness reduces the information asymmetry. The ESG disclosures in ASEAN countries now are still voluntary. This study implies that the regulators in ASEAN shall consider the benefits of ESG disclosure for investors.

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KW - environment

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KW - governance

KW - information asymmetry

KW - social

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Does environmental, social and governance (ESG) performance increase earnings informativeness? Evidence from ASEAN countries

Abstract

Keywords

UN SDGs

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