ESG PERFORMANCE AND CORPORATE FINANCIAL PERFORMANCE IN MALAYSIA’S NEW ENERGY VEHICLE INDUSTRY: A CONCEPTUAL FRAMEWORK

Abstract

The escalating demand for sustainability and environmental accountability makes the integration of Environmental, Social, and Governance (ESG) principles essential to corporate strategy. In Malaysia, the New Energy Vehicle (NEV) industry is a pivotal sector for advancing green technology, reducing carbon emissions, and fostering sustainable economic growth. Despite its rapid expansion, empirical research on how ESG performance influences corporate financial performance within the Malaysian NEV context remains limited. This conceptual paper addresses this gap by examining the relationship between ESG dimensions and key financial metrics, including profitability, market value, return on assets (ROA), and return on equity (ROE). Grounded in stakeholder theories, the study develops a theoretical model illustrating how robust environmental initiatives, social responsibility, and effective governance drive financial success. It argues that strong ESG practices enhance investor trust, improve corporate reputation, and boost operational efficiency. Ultimately, this conceptual framework offers strategic insights into leveraging ESG practices for financial gains, providing valuable guidance for policymakers, investors, industry stakeholders, and future researchers dedicated to sustainable development in Malaysia's NEV sector.