Does climate risk disclosure influence Southeast Asia energy firms' performance? The moderating role of board gender diversity

Abstract

In Southeast Asia, the energy sector is a key factor of economic development, providing essential electricity as well as fuel. This sector, however, is highly hazardous to the influences of climate change which contributes to disruptions in supply chains, increasing pressure from investors to adopt sustainable business practices. Despite a growing demand for transparency from investors, many companies in the region have only focused on publishing ESG indexes instead of climate-related risk ones. Furthermore, Board gender diversity (BGD) has been shown to enhance sustainability practices and improve the quality of Climate risk disclosure (CRD), yet there is limited research on its influence on corporate financial performance (CFP) within this context. Thus, this study tends to provide empirical evidence by examining the relationship between CRD and CFP, with a specific emphasis on the moderating effect of BGD in energy firms across Southeast Asia. The study's data sample is drawn from listed companies across six countries (Vietnam, Myanmar, the Philippines, Singapore, Indonesia, and Thailand) over the period from 2019 to 2023, with the sample sourced from the LSEG database. In line with the stakeholder theory, legitimacy theory along with value creation theory, the findings demonstrate that CRD positively influences CFP, which means that transparent climate disclosures and diverse leadership attract investors, reduce risks, and support long-term sustainability. Simultaneously, according to upper echelons theory, the results emphasize the pivotal role of CRD and BGD in driving long-term CFP in the energy sector. Based on the findings, this study enhances the theoretical foundations of sustainable finance and corporate governance, offering key insights for policymakers and companies to create value for society.