THE IMPACT OF ESG REPORTING ON Cost of Debt (COD) AND COST OF EQUITY (COE) OF LISTED COMPANIES IN THE STOCK EXCHANGE OF THAILAND
DOI:
https://doi.org/10.14456/jburus.2025.14Keywords:
ESG Disclosure, Cost of Debt, Cost of Equity, Stock Exchange of Thailand, Listed Companies in the Stock Exchange of ThailandAbstract
This research aims to examine the impact of Environmental, Social, and Governance (ESG) reporting on the cost of debt (COD) and cost of equity (COE) of listed companies on the Stock Exchange of Thailand. Data were collected from 2022 to 2024, with a sample of 147 companies obtained from the Bloomberg Terminal database. Multiple regression analysis was employed for data analysis.
Research findings reveal that ESG performance in environmental (ENV) and social (SOC) dimensions has a statistically significant negative impact on the cost of debt (COD) at the .05 level. This reflects that financial institutions and creditors place importance on sustainability risk assessment, whereby organizations with higher ESG scores are perceived as lower risk and receive more favorable financing terms. The study also indicates that the development and disclosure of standardized ESG information plays a crucial role in reducing long-term financial costs and building confidence among lenders and stakeholders, which aligns with the global trend emphasizing sustainable business practices. However, overall ESG performance was not found to have a statistically significant impact on the cost of equity (COE), suggesting that investors have not yet placed sufficient importance on ESG information in determining their required rate of return. This may stem from the nascent stage of ESG value recognition or the lack of clear evaluation criteria, indicating opportunities for development and promotion to enhance ESG's role in future investment decision-making processes.
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