Influence of sustainable practices on firm performance: Evidence from the FTSE Russell ESG Index adopted by Bursa Malaysia

Abstract

This study examined the relationships between workplace health and safety, corporate governance, environmental management, and firm performance from a financial-outcome perspective. The exogenous construct was overall sustainable practice, which was used to predict firm performance. A total of 151 corporate executives participated in the study, and a systematic sampling method was used. Data were collected through a self-administered questionnaire and analysed using Pearson correlation and multiple linear regression for hypothesis testing. The overall regression model significantly predicted firm performance. All three sustainablepractice dimensions were positively correlated with firm performance; however, only environmental management was a statistically significant predictor in the multiple regression model. Sustainable practices may improve a company’s ability to generate revenue, build brand recognition, increase operational effectiveness, and attract investors, employees, and clients. Although implementing these policies may involve initial costs, sustainability has become a strategic requirement for modern enterprises, and the long-term benefits may exceed the expenditures.