THE MODERATING ROLE OF MANAGERIAL OPTIMISM ON THE RELATIONSHIP BETWEEN SUSTAINABILITY REPORTING AND FINANCIAL, AND ENVIRONMENTAL PERFORMANCE: EVIDENCE FROM MALAYSIAN FIRMS
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Universiti Malaysia Sarawak (UNIMAS)
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This study examines the moderating role of managerial optimism in the relationship between sustainability reporting and corporate performance, focusing on financial and environmental outcomes among the Top 100 Public Listed Companies in Malaysia from 2018 to 2023. Adopting a quantitative approach with panel data regression, the research evaluates how sustainability reporting influences return on assets, return on equity, Tobin's Q, and environmental performance scores, with managerial optimism introduced as a behavioural moderator. The results indicate that sustainability reporting contributes positively to environmental performance, particularly in the recovery period, while its impact on financial performance remains mixed and largely insignificant. Managerial optimism shows limited direct effects and inconsistent moderating influence, suggesting that while optimistic attitudes may promote proactive sustainability engagement, they do not consistently translate into improved corporate outcomes. The findings underscore the importance of aligning sustainability strategies with realistic managerial perspectives and highlight the need for stronger governance and regulatory support to ensure that sustainability practices deliver both financial value and environmental accountability.