Unlock Your Firm Value with ESG Performance? Evidence from ASX-Listed Companies

Jingyan Zhou (), Wen Hua Sharpe, Abdel K. Halabi (), Helen Song and Sisira Colombage
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Jingyan Zhou: Institute of Innovation, Science, and Sustainability, Federation University, Ballarat, VIC 3350, Australia
Wen Hua Sharpe: School of Business and Creative Industries, University of the Sunshine Coast, Sippy Downs, QLD 4556, Australia
Abdel K. Halabi: Institute of Innovation, Science, and Sustainability, Federation University, Ballarat, VIC 3350, Australia
Helen Song: Institute of Innovation, Science, and Sustainability, Federation University, Ballarat, VIC 3350, Australia
Sisira Colombage: Institute of Innovation, Science, and Sustainability, Federation University, Ballarat, VIC 3350, Australia

JRFM, 2025, vol. 18, issue 5, 1-30

Abstract: A research gap exists concerning the moderating roles of corporate governance mechanisms on the nexus of environmental, social, and governance (ESG) performance and firm value. This study aims to address this gap in the Australian corporate context. We examine whether ESG performance can enhance firm value and whether this relationship is moderated by the corporate governance mechanisms to balance stakeholder interests. Drawing on a sample from the ASX, we find that while high ESG performance can increase firm value, this effect diminishes in the presence of the large number of supply chain contracts. We further discovered a negative moderating effect of board independence and audit quality on ESG performance and firm value. Our findings highlight the contingent nature of ESG value creation, indicating that while ESG activities can enhance firm value, their impact depends on firms’ governance context and contractual arrangements that shape shareholders’ outcomes collectively.

Keywords: ESG; supply chain; firm value; Australia; corporate governance; board independence; audit quality (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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