Currently, good financial fundamentals alone are not enough to attract investors. Because sustainability has become a focal point in the global economy, companies need to implement sustainable policies, including environmental score. This research thoroughly analyzes the relationship between environmental score, financial performance, and company value in the ASEAN market. The sample used consists of 215 public companies with environmental score scores from Refinitiv, originating from six ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) from 2020 to 2024. This study uses fixed and random effects models to test three main relationships. Three key variables were used: environmental score as the independent variable, company value (measured by Tobin’s Q) as the dependent variable, and financial performance (measured by Return on Equity, ROE) as the mediating factor. The research results show a positive relationship between environmental performance and financial performance, supporting Stakeholder Theory. Further analysis using Tobin’s Q shows that environmental performance increases company value, in line with the Signaling Theory because investors prioritize sustainability. Overall, environmental score performance positively impacts financial results and company value, emphasizing the importance of balancing financial and sustainability goals. This study also highlights the need for ASEAN-specific sustainability reporting standards, stronger environmental score data regulations, and further research on the long-term impacts of environmental score, cross-country variations, as well as better assessment models to capture environmental score benefits.
Hadi et al. (Fri,) studied this question.