ESG Disclosure and Financial Performance: Evidence from Listed Companies on the Stock Exchange of Thailand

This research examines the relationship between the ESG disclosure rating and firm performance of the listed companies in the stock exchange of Thailand. The study applied regression analysis using ESG disclosure rating from a sample of 210 listed firms with 420 firm-years data collected during 2023 to 2024. This study adds the use of panel data analysis and we used the Hausman test to choose between the random effect, and the fixed effect. Focusing on studying the relationship with important indicators, including return on total assets (ROA), return on equity (ROE), and Tobin's Q. As a result, ROA showed that the coefficients for both ESG scores and company size did not differ statistically significantly in both fixed-effect and random-effect analysis. However, we found that the ESG rating coefficients were statistically significant and had a negative correlation with ROE and Tobin's Q in a random effect model. The study results indicate that, at the time of the research, the operating costs of ESG outweighed the benefits, with market participants viewing ESG activities as a cost burden and regulatory compliance issue rather than a long-term value-creating factor, resulting in decreased business valuation. Therefore, companies should integrate their business strategies with ESG to improve efficiency and mitigate short-term impacts on performance.