THE INFLUENCE OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE DISCLOSURE SCORES ON THE FINANCIAL PERFORMANCE OF COMPANIES LISTED ON THE STOCK EXCHANG OF THAILAND
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Abstract
The purpose of this research was to study the relationship between environmental, social, and governance disclosure scores and financial performance of companies listed on the Stock Exchange of Thailand. Financial statement data was collected during the period 2018 - 2022 from the SETSMART database and the BLOOMBERG database. The independent variable used in the study was Environmental, Social and Governance (ESG) disclosure score and the control variables were 1. current ratio (CR) 2. asset turnover rate (AT) 3. asset growth rate 4. Firm size (Size). Whereas, the dependent variable was financial performance, including 1. Return on Total Assets (ROA) 2. Return on Equity (ROE) and 3. Tobin’s Q (TBQ). This research used multiple regression analysis to test the relationship between the variables
The results of the study were to test the estimation of the regression equation with a fixed model and a random model using Hausman's Specification Test to select the appropriate model. The results of the study indicate that the model using the method Random-Effects Regression found that Environmental, Social, and Governance (ESG) disclosure scores were negatively related to financial performance as measured by return on total assets (ROA), with statistical significance at the confidence level was 90%, but no relationship was found with financial performance measured by the TBQ indicator. The results of the study indicated that the model using the method Fixed-Effects Regression found that environmental, social, and governance (ESG) disclosure scores were not found to be related to financial performance as measured by return on equity (ROE), respectively.
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