ESG Practices and CO₂ Emissions Intensity in Malaysia’s Listed Energy Firms: Evidence from Firm-Level Panel Data

Rozilah Shabor Rameli; Ahmad Shahrul Nizam Isha; Paras Behrani

doi:10.48084/etasr.18285

Authors

Rozilah Shabor Rameli Department of Management, Universiti Teknologi PETRONAS, Malaysia
Ahmad Shahrul Nizam Isha Department of Management, Universiti Teknologi PETRONAS, Malaysia
Paras Behrani Department of Management, Universiti Teknologi PETRONAS, Malaysia

Volume: 16 | Issue: 3 | Pages: 37100-37110 | June 2026 | https://doi.org/10.48084/etasr.18285

Received: 20 February 2026 | Revised: 16 March 2026 | Accepted: 26 March 2026 | Online: 6 June 2026

Corresponding author: Rozilah Shabor Rameli

Abstract

This study investigates whether Environmental, Social, and Governance (ESG) practices are associated with firm-level decarbonization performance. The study focuses on Carbon Dioxide (CO₂) emissions intensity in Malaysia's energy industry, consistent with Sustainable Development Goal (SDG) 13: Climate Action. Firm-level evidence on emissions efficiency in Malaysia’s energy sector remains limited. Despite growing ESG-carbon literature, firm-level evidence on emissions efficiency in the Malaysian energy sector remains limited. Most studies focus on ESG-financial performance or reporting quality rather than on CO₂ emissions intensity, and often use aggregate ESG scores rather than separate ESG dimensions. ESG performance is estimated using Refinitiv ESG Scores, and decarbonization performance is measured by the intensity of Scope 1 and 2 CO₂ emissions, using panel data on energy firms listed on Bursa Malaysia Public-Listed Companies (PLCs) over the period 2018-2024. Pooled Ordinary Least Squares (OLS) regression results, estimated using SPSS and controlling for subsector and firm-year effects, reveal a negative association between overall ESG practices and CO₂ emissions intensity. Among the ESG dimensions, the environmental pillar demonstrates the most consistent relationship with emissions intensity. The study contributes industry-specific evidence from Malaysia’s energy sector and identifies the ESG dimension most closely associated with emissions efficiency, offering practical implications for stakeholders pursuing decarbonization through ESG integration.

Keywords:

ESG practices, sustainable development goals, energy transition, renewable energy, CO₂ emissions intensity, decarbonization performance, Malaysia’s energy industry

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