The persistent issue of long-term underperformance among firms has raised increasing concern within the capital market. Purpose : In response to the growing emphasis on sustainable and responsible investment (SRI), which integrates environmental, social, and governance (ESG) dimensions, we investigate whether pre-initial public offering (pre-IPO) ESG disclosure can predict firms’ long-term performance. This research is motivated by the limited empirical evidence on ESG disclosure practices within the Malaysian IPO landscape, where such disclosures remain largely voluntary. Method : Using a sample of 100 IPOs issued between 2012 and 2019, event-time analyses are employed and observed until 2024. The cumulative and buy-hold abnormal returns are employed as the dependant variables, representing long-term performance, three years post-IPO. Results : The findings reveal that voluntary pre-IPO ESG disclosure has a significant impact on firms’ long-term performance. However, the negative relationship suggests potential greenwashing effects consistent with prior literature. Furthermore, when examining the ESG dimensions individually, the study finds that social disclosure practices have a negative influence on firms’ long-term performance. Contributions : This research contributes to IPO literature by offering evidence from a developing market context on how voluntary ESG disclosures prior to listing shape firms’ sustainability. Strengthening ESG disclosure guidelines pre-IPO, aligning firms’ disclosure with actual operational capacity, and expanding future research to Association of Southeast Asian Nations markets are essential to enhance the credibility and valuation relevance of ESG information.
Alyasa-Gan et al. (2026) studied this question.