Materiality to Disclosure: Translation of ESG Materiality into Disclosure Practices

This study examines the relationship between Environmental, Social, and Governance (ESG) Materiality Score (EMS) and ESG Disclosure Score (EDS) in Indonesian and Malaysian companies. Based on 2022 Bloomberg database data, this analysis analyzed 239 companies' ESG practices through the lens of the information asymmetry theory. The findings of this study revealed a significant positive correlation between EMS and EDS in Indonesian entities, corroborating previous studies. Conversely, Malaysian companies demonstrate a subtler relationship, with governance attributes having a limited impact, necessitating a reassessment of prevailing perspectives. This study highlights the crucial influence of regional corporate and regulatory frameworks on ESG disclosure. A comparative analysis of Indonesia and Malaysia provides insights into the complex interplay among EMS, corporate governance, and ESG disclosures, offering valuable insights for corporate leaders, investors, and policymakers focused on augmenting corporate transparency and sustainability. This study enriches academic literature and presents empirical evidence that broadens the understanding of motives for ESG disclosure in different corporate and regulatory contexts.