REIMAGINING CORPORATE SUSTAINABILITY: THE ROLE OF EMPLOYEE WELLBEING IN ESG PERFORMANCE ACROSS ASEAN ECONOMIES

Abstract

This study examines the role of employee well-being in shaping corporate sustainability, measured through Environmental, Social, and Governance (ESG) performance. Using firm- level data from five ASEAN countries, Indonesia, Malaysia, the Philippines, Thailand, and Singapore over the period 2009–2021, the findings show that employee satisfaction significantly enhances ESG outcomes. The results remain robust after addressing endogeneity using simultaneous equations and generalized method of moments (GMM). Further analysis reveals that firms implementing health and safety policies and establishing dedicated safety taskforces achieve stronger ESG performance, suggesting that substantive implementation matters more than symbolic compliance. Interestingly, management quality exhibits a moderating effect, where stricter governance may reduce the positive impact of well-being initiatives. Overall, the findings highlight that investing in employee well-being is not only a social responsibility but also a strategic driver of sustainable corporate development, particularly in emerging economies. This study contributes to the literature by linking workforce welfare to sustainability outcomes and offers practical insights for policymakers and firms aiming to strengthen ESG performance.