ESG Practices and CO₂ Emissions Intensity in Malaysia’s Listed Energy Firms: Evidence from Firm-Level Panel Data

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Original abstract

This study investigates whether Environmental, Social, and Governance (ESG) practices are associated with firm-level decarbonization performance. The study focuses on Carbon Dioxide (CO₂) emissions intensity in Malaysia's energy industry, consistent with Sustainable Development Goal (SDG) 13: Climate Action. Firm-level evidence on emissions efficiency in Malaysia’s energy sector remains limited. Despite growing ESG-carbon literature, firm-level evidence on emissions efficiency in the Malaysian energy sector remains limited. Most studies focus on ESG-financial performance or reporting quality rather than on CO₂ emissions intensity, and often use aggregate ESG scores rather than separate ESG dimensions. ESG performance is estimated using Refinitiv ESG Scores, and decarbonization performance is measured by the intensity of Scope 1 and 2 CO₂ emissions, using panel data on energy firms listed on Bursa Malaysia Public-Listed Companies (PLCs) over the period 2018-2024. Pooled Ordinary Least Squares (OLS) regression results, estimated using SPSS and controlling for subsector and firm-year effects, reveal a negative association between overall ESG practices and CO₂ emissions intensity. Among the ESG dimensions, the environmental pillar demonstrates the most consistent relationship with emissions intensity. The study contributes industry-specific evidence from Malaysia’s energy sector and identifies the ESG dimension most closely associated with emissions efficiency, offering practical implications for stakeholders pursuing decarbonization through ESG integration.

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