POLICY ENFORCEMENT, ENVIRONMENTAL MANAGEMENT PRACTISES AND SUSTAINABLE BUSINESS IN MALAYSIA

Abstract

Policy enforcement and environmental management practices are key drivers in promoting sustainable business, ensuring long-term growth while protecting natural resources. This study investigated the relationship between environmental management practises and the implementation of policy to support sustainable business. This study employs a panel data regression model to analyse publicly listed companies in Malaysia over the period 2011-2022. The results show that while regulatory enforcement mitigates the association, a company’s environmental management practices do not significantly influence its capacity to conduct sustainable business. This suggests that companies comply with environmental laws and guidelines primarily due to regulatory pressure rather than voluntary initiative. However, when businesses adhere to mandated environmental practices, they are better positioned to implement sustainable operations. This study supports the notion that managing day-to-day operations with a balanced focus on economic, social, and environmental concerns is essential for corporate development. Such an approach may shift a firm’s perspective from mere compliance toward integrating sustainability as a strategic objective, ultimately enhancing long-term economic performance. Furthermore, the study provides valuable insights into the effectiveness and limitations of existing policies, which can inform future policy formulation and contribute to the development of more robust and adaptable regulatory frameworks.