ESG Reporting and Accounting Conservatism of Malaysian Firms

Many studies document that environmental, social, and governance (ESG) reporting is beneficial to firms. We extend the literature to study the relationship between ESG reporting and accounting conservatism. Our sample consists of the top 100 firms by market capitalization listed on Bursa Malaysia. The sample covers the period from 2019 to 2021. Accounting conservatism is measured based on Basu’s (1997) model. Our result shows that accounting conservatism exists among the sample firms. The result also shows that accounting conservatism does not differ between ESG firms and non-ESG firms. Furthermore, the result shows that accounting conservatism does not differ between high-ESG performance firms and low-ESG performance firms.