Proceedings of the Asia-Pacific Research in Social Sciences and Humanities Universitas Indonesia Conference (APRISH 2019)

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The Impact of Environmental, Social, and Governance Performance on Firm Risk in the ASEAN-5 Countries, 2011-2017

Authors
Anindita Nur Annisa, Dwi Hartanti
Corresponding Author
Dwi Hartanti
Available Online 31 May 2021.
DOI
10.2991/assehr.k.210531.078How to use a DOI?
Keywords
ESG score, firm risk, systematic risk, idiosyncratic risk
Abstract

This study examines the effect of environmental, social, and governance (ESG) performance on firm risk in South East Asia. The ESG performance is measured using the Thomson Reuter’s ESG Score, which is further classified into the ESG Score, the ESG Controversy Score, and the ESG Combined Score. The risk is measured using total risk, systematic risk, and idiosyncratic risk. Employing 145 firms in ASEAN-5 countries namely Indonesia, Malaysia, Thailand, the Philippines, and Singapore as samples for the period 2011–2017, it is found that the ESG performance has a significant inverse effect on firm risk after controlling for the law enforcement difference in each country and other control variables. The ESG performance significantly affects total risk and idiosyncratic risk, but not systematic risk. There is also no effect found for the ESG Controversy Score, which acts as the proxy for a firm’s involvement in controversial events related to ESG–on any proxy of risk. Overall, these findings support the previous studies in other regions that an increase in a firm’s ESG performance could lower firm risk.

Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the Asia-Pacific Research in Social Sciences and Humanities Universitas Indonesia Conference (APRISH 2019)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
31 May 2021
ISBN
978-94-6239-385-1
ISSN
2352-5398
DOI
10.2991/assehr.k.210531.078How to use a DOI?
Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

risenwbib
TY  - CONF
AU  - Anindita Nur Annisa
AU  - Dwi Hartanti
PY  - 2021
DA  - 2021/05/31
TI  - The Impact of Environmental, Social, and Governance Performance on Firm Risk in the ASEAN-5 Countries, 2011-2017
BT  - Proceedings of the Asia-Pacific Research in Social Sciences and Humanities Universitas Indonesia Conference (APRISH 2019)
PB  - Atlantis Press
SP  - 625
EP  - 634
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.210531.078
DO  - 10.2991/assehr.k.210531.078
ID  - Annisa2021
ER  -