The Muamalat Newsletter Vol. 2 2024

FEM eNewsletter | December 2024 62 Antecedents of ESG Disclosure in Malaysian Firms: A Comprehensive Review Richard Seow Business Consultant and Independent Researcher drivers of its ESG disclosure practices. Larger firms, endowed with greater resources, are typically more motivated to disclose ESG information in order to boost their reputation andaddress theexpectations of stakeholders (Ho et al., 2020). For example, highly profitable companies often achieve higher ESG ratings because they possess the financial means to invest in sustainability initiatives. On the other hand, firms with higher debt levels may prioritize immediate financial concerns over long-term sustainability goals, resulting in lower levels of ESG disclosure (Alam et al., 2022). In the Malaysian context, many companies listed on Bursa Malaysia have adopted ESG reporting, spurred by regulatory initiatives like the FTSE4Good Bursa Malaysia Index. However, firms facing financial difficulties tend to be less transparent in their ESG disclosures, focusing more on short-term financial outcomes (Alam et al., 2022). This underscores the importance of financial health as a critical determinant in ESG reporting. 2. The role of regulatory frameworks Regulatory frameworks have been a key In the recent years, there has been greater emphasis on corporate sustainability practices among private sector (Seow, 2024b). As such, environmental, social, and governance (ESG) disclosures have become increasingly central to corporate transparency and accountability, particularly in developing economies such as Malaysia (Seow & Loo, 2023). As stakeholder and investor expectations for transparency around sustainability continue to grow, companies are not only encouraged but often required to disclose their ESG-related activities (Seow, 2024e). These reports offer crucial insights into how businesses handle risks and capitalize on opportunities linked to environmental, social, and governance dimensions. As a result, the topic has garnered significant academic attention globally (Seow, 2024c). This article delves into the factors influencing ESG disclosure among Malaysian companies, drawing from the existing body of ESG literature. 1. Corporate characteristics The characteristics of a company, such as its size, profitability, and leverage, are key