Environmental, Social, and Governance (ESG) and Corporate Tax Avoidance: Evidence from Non-Financial Firms in Indonesia, Malaysia, and Singapore

Nabela Khoiriyah (Universitas Airlangga)
Habiburrochman Habiburrochman (Universitas Airlangga)

EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis
Vol 14 No 3 (2026): Juli

This study aims to examine how Environmental, Social, and Governance (ESG) factors influence tax avoidance in non-financial companies across Indonesia, Malaysia, and Singapore from 2019 to 2023. ESG data and tax avoidance metrics, based on the Current Effective Tax Rate (CETR), were collected from Bloomberg. Regression analysis indicates that ESG has a significant negative impact on tax avoidance. Further tests revealed that only the governance component had a significant negative effect, while the environmental and social components were not significant. These results support the Legitimacy Theory, which suggests that sustainability commitments, especially governance, promote more ethical tax behavior.