CARBON DIOXIDE ( CO2 ) EMISSIONS, SUSTAINABLE ACHIEVEMENT AND FIRM PERFORMANCE
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Universiti Malaysia Sarawak (UNIMAS)
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This study investigates the relationship between carbon dioxide (CO₂) emissions and firm performance, with a focus on the moderating effect of sustainable achievement, among 61 publicly listed Malaysian companies across the energy, manufacturing, construction, and transportation sectors. The analysis covers the period from 2018 to 2023 and aims to understand how environmental impact and sustainability practices influence corporate financial outcomes. In response to the global climate agenda, the research explores how firms align their operations with sustainability goals. A quantitative research design is employed, utilizing panel regression models to examine the effects of total CO₂ emissions and carbon disclosure on firm performance, measured through Return on Assets (ROA) and Tobin’s Q. ESG scores are used as a proxy for sustainable achievement to test potential moderating effects. The results reveal that neither total CO₂ emissions nor carbon disclosure show a direct significant relationship with firm performance. However, sustainable achievement demonstrates a significant moderating effect in the relationship between CO₂ disclosure and profitability, suggesting that transparency is more valuable when backed by credible ESG performance. These findings offer important insights for policymakers, investors, and corporate leaders seeking to balance environmental responsibility with financial performance in the context of an emerging market like Malaysia.