Energy Conservation and Firm Performance in Thailand: Comparison between Energy-Intensive and Non-Energy-Intensive Industries

Abstract

This study investigated and compared energy conservation levels between listed companies in energy-intensive industries and non-energy-intensive industries in Thai capital markets. It also tested the impact of energy conservation on firm performance using companies in the two industries. The sample for the study was sourced from 552 companies in the Stock Exchange of Thailand (SET) and 169 companies in the Market for Alternative Investment (MAI). The data was collected from the companies' annual reports spanning the period from 2016 to 2020. Descriptive analysis, independent sample t-test, and unbalanced panel data analysis were used to analyze data. The findings revealed that energy conservation scores for Thai-listed companies were generally stable, averaging between 0.45 and 0.46. It was also revealed that the energy conservation of companies in energy-intensive industries was significantly greater than that of companies in non-energy-intensive industries, with average scores of 0.55 and 0.43, respectively. Additionally, the study found that energy conservation has a positive impact on the firm performance of energy-intensive industries, while no significant impact in energy-intensive industries was recorded. The findings demonstrate that stakeholder and legitimacy theories can help explain how energy conservation benefits companies in terms of increased firm performance.

1. Introduction

Climate change and global warming are critical issues in sustainable business development [1] as they pose negative environmental consequences for global economic and industrial development [2]. The empirical verification of unusual patterns of negative consequences encourages global initiatives to protect the environment and prevent global problems associated with climate change [1,3]. As global climate change concerns keep growing, energy conservation and reduction in carbon emissions have become crucial priorities in industrial activities [4,5]. These concerns are demonstrated through corporate social and environmental responsibility via prudent care in using resources and energy as good citizenship [6]. Environmental impact regarding energy use and emission reduction are key issues to consider when evaluating corporate environmental performance [7,8]. Energy conservation assists businesses in reducing their energy use, saving operation costs, and benefiting the environment. As a result, energy saving and carbon reduction are becoming more prominent for both commercial and industrial sector operations [5,9].

Thailand is one of the largest crude oil importers and the second largest energy consumer in Southeast Asia [1,10]. At the same time, crude oil is Thailand's leading import product [11]. Manufacturing expansion has been the driving force behind the country's economic growth. The nation's electricity and energy demand have increased rapidly [9,12]. In response to the growing energy demand, the Thai government developed and implemented the Thailand Power Development Plan. The plan contained several important issues, including increasing the energy supply and reducing energy consumption [9,12]. As a result, Government support for energy conservation has been implemented in businesses [10]. For Thai listed companies, Corporate Social Responsibility (CSR) and Environment, Social, and Governance (ESG) practices have been promoted by key regulators, including the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) [13]. Energy consumption and carbon emissions are the key issues that listed companies should consider while operating their CSR and ESG practices, especially in the environmental aspect. The SEC has modified the Annual Registration Statement to be a single form called the “56-1 One Report” to assist listed companies in enhancing the disclosure of ESG information [14]. The report requires Thai-listed companies to disclose their plan, performance, and environmental outcomes in the section titled “Driving Business for Sustainability”. The companies are required to describe reductions in energy consumption, waste, and pollution, as well as greenhouse gas reduction management. The implementation of the power development plan by the Thai government and other interventions introduced by key regulators have prompted companies to focus on energy and environmental conservation [1,15]. The companies have put in efforts to reduce energy consumption in response to government and regulatory incentives as well as rising energy costs.

Several previous studies investigated energy reporting [4], and some demonstrated the positive impact of energy conservation on firm performance [1,16,17]. However, unlike general environmental reporting in the literature, there have been a limited number of studies in Thailand focusing on energy conservation. Particularly, there have been a lack of energy conservation studies among listed companies, which are more visible and deal with higher stakeholder pressures to provide disclosure than non-listed companies [18]. It is argued that larger private businesses are subjected to greater pressures from interest groups and, as a result, should be more susceptible to public opinion in favor of disclosing environmental information [19,20]. Accordingly, it is important to examine the effect of energy conservation on the performance of Thai-listed companies to determine whether their responses to energy conservation demands and pressures impact o their performance.

The comparison of energy conservation between companies in energy-intensive and non-energy-intensive industries forms a crucial aspect of this study. This is because energy intensity and emissions are typically highly sensitive to industry clusters where more attention could be paid to energy- and pollution-sensitive industries [21,22]. There are disparities in the energy and emission management practices of businesses in different industries with varying environmental sensitivity [1,12,23,24]. Stakeholders of energy-intensive industries tend to have higher expectations than those in non-energy-intensive industries [1]. Therefore, the first group will likely have greater energy and emission management. In addition, in Thailand, studies have found that the effectiveness of government energy policy is centered on a few industries, such as paper, transportation, and logistics [10]. Therefore, comparing energy conservation between companies in energy-intensive and non-energy-intensive industries could help determine whether pressure from regulators and stakeholders seeking environmental and energy accountability distinguishes the energy conservation practices of different industries.

This study focused on energy conservation due to the paucity of studies examining energy conservation and disclosures of Thai listed companies. It can be argued that the Thai government and important regulators have encouraged Thai-listed companies to concentrate on energy conservation [1,15]. Therefore, the research questions underpinning this study focused on the extent to which Thai-listed companies employ energy conservation measures in their operations through a comparative analysis of two groups of industries; energy-intensive industries and non-energy-intensive industries. In addition, this study also focused on the impact of energy conservation on firm performance. Consequently, the objectives of this study are to (1) investigate the levels of energy conservation, (2) compare the levels of energy conservation between companies in the energy-intensive industries and non-energy-intensive industries, and (3) test the impact of energy conservation on firm performance of listed companies in Thai capital markets.

2. Literature Review and Hypothesis Development

This section provides the background of energy conservation in Thailand. Additionally, the section highlights the stakeholder and legitimacy theories to help explain the impact of energy conservation on firm performance. The last two sub-sections outline the two hypotheses that underpin this study.

2.1. Energy Conservation in Thailand

Population and economic growth in Southeast Asia have placed its energy sector outlook in the global spotlight [4]. As reported by International Energy Agency [25], the region's total demand for primary energy has increased rapidly, with substantial increases in the use of coal, oil, natural gas, and renewable energy sources. In many regions of Southeast Asia, there have been policy and regulatory advancements, including more ambitious climate targets and updated expansion plans for energy renewables. However, energy policy priorities vary from country to country. There are various approaches to securing new energy supplies to meet rising energy demand and achieve climate goals.

Thailand is one of the largest crude oil importers and energy consumers in Southeast Asia [1,10]. Manufacturing expansion has been the driving force behind the country’s economic growth. The nation's electricity and energy demand has increased rapidly [9,12]. Thailand's energy demand per capita nearly doubled between 2000 and 2019 [25]. In the next two decades, crude petroleum imports are projected to account for more than 90 percent of total domestic consumption. Thailand has become increasingly reliant on imported energy [12]. As a result of the increasing energy demand and climate change, the Thai Government drafted and implemented the Thailand Power Development Plan containing several important issues, including increasing energy supply and reducing energy consumption [9,12]. The government announced its intention to strengthen energy security by reducing energy intensity by 30 percent by 2036, achieving carbon neutrality by 2050 and net zero emissions by 2065, and increasing the share of renewable energy to 30 percent of total final energy consumption by 2037 [26]. Essentailly, the government has shown it is committed to supporting energy conservation and ensuring that environmental considerations for sustainability are implemented in businesses [10].

To achieve these goals, CSR and ESG practices have been promoted by the key regulators of Thai listed companies, including the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) [13]. Energy consumption and carbon emissions are the key issues that listed companies should consider while operating their CSR and ESG practices, especially in the environmental aspect. In addition, during the preparation of the ESG rating by the Thaipat Institute, it was found that energy and environmental management are important issues to be considered [27]. The main purpose of the ESG rating was to select and disclose a list of listed companies with outstanding ESG practices in promoting the development of ESG disclosure levels among listed companies [28].

In 2013, the SEC revised the format of annual reports by requiring companies to add social responsibility disclosure in their annual reports. The SEC released CSR Disclosure Guidelines that comprised eight principles. One of the key principles is environmental concerns which emphasizes energy conservation regarding the sustainable use of natural resources with environmental awareness as a priority [27]. Since then, the SEC has intensified its promotion of information disclosure in the annual reports. In 2020, it merged the Annual Registration Statement (Form 56-1) and the Annual Report (Form 56-2) into a single form called the “56-1 One Report” to assist listed companies in enhancing the disclosure of ESG information [14]. With the amendments, Thai-listed companies must disclose ESG information through a section labeled “Driving Business for Sustainability”. Sustainability management in the environmental dimension is one of the topics that companies must disclose in this section. The company must describe the plan, performance, and environmental outcomes associated with its business operations, such as reductions in energy consumption, waste, and pollution, as well as greenhouse gas reduction management.

The interventions put in place by the Thai government and key regulators have prompted companies to focus on energy and environmental conservation [1]. Orapin [15] researched the CSR disclosure of companies included in the SET 100 Index. It was discovered that the word “environment” had the highest average disclosure amount, with a concentration on responsible management of energy and resources. The listed companies paid attention to the reduction of energy consumption in response to government and regulatory incentives as well as rising energy costs. Energy management has a number of benefits, including cost reduction, performance improvement, and reductions in adverse social and environmental impacts [1]. A business strategy emphasizing energy efficiency enhancements will likely reduce expenses and boost overall productivity [16]. As the Thai government encourages companies to improve their energy conservation management through an investment and tax incentive program [10], companies not only save their operating costs but also gain additional benefits that positively impact performance [1].

2.2. Theoretical Framework

A business organization exists not only for itself but also to meet the needs of a society, community, or an individual as an operator of socioeconomic activities [29]. Annual or other types of reports, which are mandatory or voluntary, are used by companies to demonstrate their compliance with such responsibilities. Nonfinancial reporting has been considered a part of fostering sustainability by disclosing information demonstrating corporate responsibilities. The reasons companies disclose their nonfinancial information have been highlighted in the previous literature. Stakeholder theory and legitimacy theory are important theories that are frequently used to describe the motivations of companies for disclosing information [3]. As this study focuses on energy conservation disclosure, both theories explain companies' motivations for disclosing energy conservation information, beginning with the stakeholder theory.

2.2.1. Stakeholder Theory

Stakeholder theory explains the purpose of energy conservation disclosure from the viewpoint of information demanders and social responsibility. It is argued that companies must act responsibly toward governments, regulators, investors, and other stakeholders by providing accurate and unique environmental information to them to satisfy multiple and conflicting demands between them [30,31,32]. Moreover, energy conservation information represents social responsibility that indicates the concerns of companies in solving energy shortage and climate change problems. The connection between companies and their stakeholders in terms of environmental performance has many dimensions [33]. Donaldson and Preston [34] argued that there are three approaches to stakeholder theory; namely, descriptive, instrumental, and normative. Firstly, the descriptive stakeholder approach describes how businesses perform and how they should operate. It demonstrates the significance of various stakeholders other than managers and how their needs should be addressed to improve corporate performance. This approach recognizes that each stakeholder group has interests that affect the company in different ways. Differentiating between critical stakeholders and other stakeholders is vital for companies' survival. Therefore, companies must develop fair systems to balance the different interests of each stakeholder group [35]. Secondly, the instrumental approach looks at stakeholders as a means of improving firm performance. Here, companies employ data to establish the optimal manner of stakeholder management to achieve their financial performance. Lastly, the normative approach adheres to the concept that all stakeholder groups' interests are worth independent of the company's and shareholders' interests. The normative approach creates social and ethical practices in the concept of social and environmental responsibility [36]. The environment could be subjected to stakeholder theory in formulating strategies that aim at environmental responsibility [37]. According to Delmas & Blass [8], the environmental impacts in terms of energy management and climate change, as well as regulatory compliance, are key aspects for demonstrating corporate environmental performance. Due to the constant increase of stakeholder pressure on environmental responsibility, companies are required to provide energy conservation information to demonstrate their care for environmental problems as one of the representatives of their environmental performance.

2.2.2. Legitimacy Theory

Stakeholder theory integration may not be complete without the critical insights offered by legitimacy theory [20]. Legitimacy theory explains the motivation of businesses through the lens of society's expectations by considering whether the company has met or exceeded the expectations of society [24]. This theory views an organization as a part of a larger system that, if expectations are not met, leads it to lose access to resources or even cease to exist. Consequently, businesses operate in an environment where they have access to essential resources, referred to as legitimacy [38]. Any effort aiming at environmental sustainability cannot be made public and verifiable without a reporting system designed to enhance public perception [20,39]. From the perspective of energy conservation, companies will legitimize their existence by sharing information on energy management and climate change concerns [38,40]. Neu et al. [39] found a significant association between environmental disclosure and public pressure. He argued that environmental disclosures would vary over time in response to public concerns. Currently, the problem of energy shortage and global warming is a topic of attention to society and market regulators. Corporate energy conservation disclosures correspond to such situations. Energy conservation disclosures, therefore, have certain positive effects on companies in fostering a positive image and enhancing their reputation [41,42].

Both stakeholder theory and legitimacy theory acknowledge the favorable effects that energy conservation disclosure has on companies. Therefore, this study utilized the conceptual framework of both theories to determine whether energy conservation disclosure results in improved corporate performance. In addition, it is assumed that companies in energy-intensive industries tend to be more visible in public eyes, and they are likely to disclose more information to address the public's expectations. This leads to the development of the following hypotheses.

2.3. Energy Conservation between Energy-Intensive and Non-Energy-Intensive Industries

As the nature of industry impacts a firm's operations, a comparative analysis of different industries would enhance comprehension of environmental practices [3]. This study focused on comparing energy conservation between energy-intensive and non-energy-intensive industries. Typically, companies in energy-intensive industries gain more attention on their energy intensity and emissions than non-energy-intensive industries because they are perceived to have a higher environmental impact [21,22]. In addition, companies in energy-intensive industries are required to conform to more stringent energy and environmental regulations [1] and rely on a particular energy source [12]. Patten [43] argued that companies in environmentally sensitive industries might foster environmental disclosure to be more exposed to alleviate the pressures and criticism from social groups. Consequently, companies in energy-intensive industries have better energy and emission management and more disclosure on energy conservation than those in non-energy-intensive industries. This assumption is supported by Dragomir [20] 's finding that companies perceived as large polluters are more likely to disclose information about their environmental actions. Lu et al. [23] investigated carbon disclosure taken from CDP reports of Fortune 500 companies. Their findings indicated that companies in carbon-intensive industries disclose slightly more information on average than those in non-carbon-intensive industries. Similarly, Dan & Shen [30] investigated the differences in disclosure among listed companies from the energy and non-energy sectors on the Warsaw Stock Exchange. They found that companies in the energy sector publish higher-quality disclosure regarding energy management systems and voluntary carbon emissions rather than companies in the other sectors.

In Thailand, Suttipun & Duriyarattakan [1] compared the level of energy management between companies in the majority and minority industries. They found that there are significantly different levels of energy management between the two groups. Supasa et al. [10] discovered that the success of the energy strategy implemented by the Thai government was limited to a few industries, such as paper, transportation, and logistics industries. Hasanbeigi et al. [44] studied energy efficiency among Thai companies selected from both the energy-intensive and non-energy-intensive industries. They found that the differences between the two groups affected energy efficiency in distinct ways. This is in line with earlier studies that investigated environmental and corporate social responsibility disclosures of listed companies in Thailand. It was found that companies in energy-intensive industries have a propensity to give environmental concerns the highest priority, while non-energy-intensive industries emphasize social issues [45,46]. Based on the findings from previous studies, it is hypothesized that:

Hypothesis 1 (H1).

There is a different level of energy conservation between companies in energy-intensive and non-energy-intensive industries.

2.4. Energy Conservation and Firm Performance

It is believed that energy or environmental management can give numerous long-term benefits, such as lowering production costs [47], satisfying stakeholder demands, and fostering a new culture of sustainable development between businesses and their stakeholders [48,49]. The widespread interest in the relationship between environmental performance and corporate performance has resulted in several meta-analyses that summarize the findings of several previous studies. They concluded that a company's environmental performance positively correlates with economic performance [50,51,52,53,54].

In addition, there have been several studies that examine environmental performance in terms of energy conservation and carbon emission management. Suttipun & Duriyarattakan [1] investigated the energy management strategies of 400 manufacturing companies in Thailand. It was found that energy management has a positive influence on a firm's financial performance. Perez-Calderon et al. [55] analyzed energy consumption and water and air emissions as variables representing environmental performance. The results revealed a positive relationship between firm value and environmental performance. Similarly, Lin et al. [56] found a positive relationship between energy and climate change, environmental policy reporting, resource management, and financial performance in the automobile industry. The results align with Fan et al. [57], who discovered that firms that consumed less energy had better financial outcomes. Li et al. [58] investigated the impact of environmental performance on the firm performance of the top 500 publicly traded US companies by using energy, carbon, waste, and water productivity. The results showed the positive impact of environmental performance on firm performance. Klimontowicz et al. [7] evaluated the energy behaviors of commercial banks operating in the Polish banking market. They found that banks that are more likely to demonstrate energy behaviors and manage their costs more effectively are more attractive to investors.

On the other hand, some studies have not found a positive relationship or influence between energy conservation and firm performance. For instance, Chlyeh [59] examined the effect of renewable energy performance on the financial performance of 563 enterprises in 46 countries. The results revealed that renewable energy performance has a negative effect on profitability in developed economies due to massive expenditures. Dragomir [20] examined the environmental performance using energy, emissions, and waste as key proxies from companies quoted on European stock exchanges. The results indicated no significant relationship between environmental performance and firm performance. Similarly, Pintea et al. [47] used carbon emission performance as the proxy of the environmental performance of Romanian companies and found an insignificant linkage between environmental and financial performance.

The findings of previous studies are inconsistent due to differences in measures, study areas, and time frames. Studying the energy conservation of Thai-listed companies would shed light on the contribution of energy conservation to firm performance. Following the findings of Suttipun & Duriyarattakan [1], it can be assumed that government and regulatory policies, as well as stakeholder and societal pressure, require businesses to demonstrate energy conservation. If the companies can adhere to such policies and expectations, their performance will improve. Therefore, it is hypothesized in this study that:

Hypothesis 2 (H2).

There is a positive impact of energy conservation on firm performance.

3. Methods

3.1. Population and Samples

Listed companies from SET and MAI from 2016 to 2020 [14] formed the samples for this study. However, companies that did not meet the following conditions were excluded, that is: (1) end their fiscal year on 31 December; (2) were not registered in the property fund sector; (3) had incomplete financial data, and (4) were not withdrawn from listing by the SET or the MAI. These included listed companies under rehabilitation. Following the conditions outlined above, 721 listed companies were chosen as the sample size for this study. These were categorized into 552 listed companies in the SET and 169 firms in the MAI.

3.2. Data Collection

Corporate annual reports from these samples that spanned 2015 to 2019 were used to collect secondary data. In total, there were 3433 annual reports used in this study, with 2678 and 755 annual reports from listed companies in the SET and the MAI, respectively. The annual report is a statutory report widely acknowledged as the principal means by which companies communicate their actions and operations [60], which is why it is used to collect secondary data in this study. Two main sets of data were gleaned from the corporate annual reports, which are energy conservation and firm performance.

3.3. Variable Measurement

Energy conservation as the independent variable was measured by energy conservation scores (ECS) and based on the energy conservation index to examine the level of energy conservation disclosed in annual reports. The index, which consists of 13 components (as shown in

Table 1. Energy conservation index.

Innovation	1. R&D investment in energy-saving technology
	2. Retrofit the production process for energy-saving
	3. Replacing equipment with energy-efficient equipment
	4. Budgeting for energy conservation or efficiency
Residue recycling	5. Recycling residual energy
	6. Recycling waste material and by-products
Carbon Emission	7. Carbon reduction
	8. Carbon emission in operation
Energy conservation strategy	9. Short-term objective for energy conservation in the firm
	10. Long-term vision for how to reduce energy consumption in the firm
	11. Clear plan for how to conduct energy conservation activities
Implementation in operation	12. Systematic control of energy consumption in the production process and management
	13. Awareness building concerning energy conservation

), was created based on previous studies on corporate energy conservation practices [4,5,6,7,61,62,63]. The disclosure index provides an aggregated measure of the quantity of disclosure within the annual report. It also provides the total assessment of the amount of information disclosed in the annual report [64]. The binary coding system was employed to prevent issues with subjectivity [65] with the assumption that all items have the same significance [7]. If the information is disclosed or available in the company's annual report, the value of that item is 1. On the contrary, if it is not disclosed or not available, the item is valued as 0. After getting the total points of all items, the energy conservation scores were computed. The score is a ratio of all points given for each item to the total number of points. Therefore, the range of energy conservation scores is from 0 to 1.

Regarding firm performance as a dependent variable, return on assets (ROA) was used as a proxy in this study. Among financial performance parameters, ROA is the most popular [66,67]. It is recognized as the most concerned indicator of corporate stakeholders and widely used by previous studies because it can reflect both operational performance [68,69] and financial status without the effect of extraordinary events [70]. In addition, the control variables consisted of firm age, firm risk (leverage), firm size, and firm year which were used in this study to avoid overestimating or underestimating the hypothesized relationships. These proxies have been used as the control variables in previous studies [48,70,71]. The variables measurements in this study are shown in

Table 2. Variable measurements.

Variable Type	Variable Name	Notation	Measurement
Dependent Variable	Financial performance	ROA	Return on assets (ROA)
Independent Variable	Energy score	ECS	Score of energy conservation
	Firm age	AGE	Year of firm age
	Leverage	LEV	Debt to equity ratio
Control Variable	Firm size	SIZE	Natural logarithm of total assets
	Firm year	YEAR	Annual report year

below.

3.4. Data Analysis

The data were analyzed using the SPSS Statistics Software Program (Version 22). The data were first examined using descriptive statistics to determine the extent and pattern of energy conservation in annual reports of both SET and MAI-listed companies. The study compared the level of energy conservation between the listed companies in energy-intensive and non-energy-intensive industries. Therefore, the listed companies were divided into 2 groups. The companies in the energy-intensive industries (denoted as EI) are comprised of energy, steel, metal, paper materials, petrochemicals, chemicals, mining, transportation, and logistics [4,10,65], while the non-energy-intensive industries (denoted as NEI) were all companies in the other industries. An Independent sample t-test was used to compare energy conservation levels between companies in the energy-intensive and non-energy-intensive industries in Hypothesis 1. All the variables in this study were tested for multicollinearity using a correlation matrix. Finally, unbalanced panel data analysis was utilized to investigate the possible impact of energy conservation on the performance of listed companies in Thailand. Three models were used to investigate the impact of energy conservation on firm performance. Model A indicated the impact of all companies based on the assumption in Hypothesis 2. Models B and C present the analysis and results of subgroups, including companies in energy-intensive and non-energy-intensive industries, respectively. The unbalanced panel data analysis equations are shown below:

$$\mathrm{Model}\mathrm{A}:{\mathrm{ROA}}_{\mathrm{T}}=\mathsf{\beta }0+\mathsf{\beta }1{\mathrm{ECS}}_{\mathrm{T}}+\mathsf{\beta }2{\mathrm{AGE}}_{\mathrm{T}}+\mathsf{\beta }3{\mathrm{LEV}}_{\mathrm{T}}+\mathsf{\beta }4{\mathrm{SIZE}}_{\mathrm{T}}+\mathsf{\beta }5{\mathrm{YEAR}}_{\mathrm{T}}+\epsilon$$

(1)

$$\mathrm{Model}\mathrm{B}:{\mathrm{ROA}}_{\mathrm{EI}}=\mathsf{\beta }0+\mathsf{\beta }1{\mathrm{ECS}}_{\mathrm{EI}}+\mathsf{\beta }2{\mathrm{AGE}}_{\mathrm{EI}}+\mathsf{\beta }3{\mathrm{LEV}}_{\mathrm{EI}}+\mathsf{\beta }4{\mathrm{SIZE}}_{\mathrm{EI}}+\mathsf{\beta }5{\mathrm{YEAR}}_{\mathrm{EI}}+\epsilon$$

(2)

$$\mathrm{Model}\mathrm{C}:{\mathrm{ROA}}_{\mathrm{NEI}}=\mathsf{\beta }0+\mathsf{\beta }1{\mathrm{ECS}}_{\mathrm{NEI}}+\mathsf{\beta }2{\mathrm{AGE}}_{\mathrm{NEI}}+\mathsf{\beta }3{\mathrm{LEV}}_{\mathrm{NEI}}+\mathsf{\beta }4{\mathrm{SIZE}}_{\mathrm{NEI}}+\mathsf{\beta }5{\mathrm{YEAR}}_{\mathrm{NEI}}+\epsilon$$

(3)

4. Results and Discussion

4.1. Descriptive Statistics

The descriptive statistical analysis of the energy conservation disclosure score is reported in

Table 3. Descriptive analysis of energy score and t-test for differences in energy and non-energy-intensive industries.

Score	2016	2017	2018	2019	2020	Average
	n Mean (SD)	n Mean (SD)	n Mean (SD)	n Mean (SD)	n Mean (SD)	n Mean (SD)
Total	647	676	684	705	721	3433
	0.45	0.45	0.45	0.46	0.46	0.45
	(0.28)	(0.28)	(0.28)	(0.28)	(0.28)	(0.28)
Energy	121	130	130	130	129	640
	0.55	0.54	0.55	0.54	0.56	0.55
	(0.30)	(0.30)	(0.30)	(0.30)	(0.30)	(0.30)
Non-Energy	526	546	554	575	592	2793
	0.42	0.42	0.43	0.44	0.44	0.43
	(0.27)	(0.27)	(0.27)	(0.27)	(0.27)	(0.27)
Variable	n	Mean	SD	t	Sig.
Energy	640	0.55	0.30	−8.89	0.00
Non-Energy	2793	0.43	0.27

and Figure 1. The mean energy score (ECS) was 0.45, and a standard deviation of 0.28 was recorded. This suggested that, on average, Thai-listed firms disclose 45% of energy conservation items in the index in their annual reports. In terms of a yearly disclosure level, energy conservation disclosure fluctuated between 2016 to 2020.

The descriptive analysis of energy conservation disclosure score for energy and non-energy intensive industries listed firms revealed that the number of samples in energy and non-energy intensive industries were 640 and 2793, respectively. The average disclosure score of energy-intensive industries was 0.55, with a standard deviation of 0.30. For the non-energy-intensive industries, the average value of the disclosure score was 0.43, and the standard deviation was 0.27. The results indicate that firms operating in energy-intensive industries were likelier to practice energy conservation disclosure than non-energy-intensive industries.

The results of testing whether there is any difference in the level of energy conservation disclosure for the energy and non-energy-intensive industries using an independent sample t-test is shown in Table 3. The result revealed a difference in the level of energy conservation disclosure between energy and non-energy-intensive industries (t = −8.89, p < 0.05). The mean values of energy conservation disclosure of energy and non-energy industries were 0.55 and 0.43, respectively, indicating that the average level of energy conservation disclosure for energy-intensive industries firms was higher.

The results of this study depicted that the ECS of Thai-listed companies has a pattern of stability. However, it is found to increase slightly, particularly in non-energy-intensive industries. Additionally, it was discovered that the ECS of energy-intensive industries was significantly greater than that of non-energy-intensive industries. This shows that companies in energy-intensive industries, which have been anticipated by society and stakeholders, have higher operations and disclosures of energy conservation. This is consistent with previous studies indicating that companies in environmentally or energy-sensitive industries disclose more information on environment or energy conservation than lower sensitive industries [1,23,24,65].

4.2. Correlation Analysis

The correlation matrix for the variables in the samples, energy and non-energy intensive industries, are reported respectively in

Table 4. Correlation matrix for the entire sample.

Variables	ROA	ECS	AGE	LEV	SIZE	YEAR
ROA	1	0.07 **	−0.06 **	0.17 **	0.09 **	−0.04 *
ECS	-	1	0.06 **	0.05 **	0.14 **	0.01
AGE	-	-	1	0.01	0.19 **	0.06 **
LEV	-	-	-	1	−0.01	−0.01
SIZE	-	-	-	-	1	0.02
YEAR	-	-	-	-	-	1

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

,

Table 5. Correlation analysis between variables (EI).

Variables	ROA	ECS	AGE	LEV	SIZE	YEAR
ROA	1	0.03	−0.03	0.3 **	0.02	−0.10 **
ECS	-	1	−0.01	0.06	0.10 *	−0.04
AGE	-	-	1	0.05	−0.15 **	0.10 *
LEV	-	-	-	1	−0.07	−0.03
SIZE	-	-	-	-	1	0.03
YEAR	-	-	-	-	-	1

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

and

Table 6. Correlation analysis between variables (NEI).

Variables	ROA	ECS	AGE	LEV	SIZE	YEAR
ROA	1	0.10 **	−0.07 **	−0.09 **	0.11 **	−0.02
ECS	-	1	0.13 **	0.01	0.15 **	0.03
AGE	-	-	1	0.05 *	0.28 **	0.05 **
LEV	-	-	-	1	0.13 **	−0.01
SIZE	-	-	-	-	1	0.02
YEAR	-	-	-	-	-	1

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

. The correlation coefficients between return on assets and energy conservation score were positive and significant, as presented in Table 4 and Table 6, whereas positive but insignificant were presented in Table 4. Regarding the multicollinearity test, the results of the three tables indicated that the highest correlation coefficients between independent variables were less than 0.7. This indicates that the multicollinearity problem did not exist in this study's models.

4.3. Regression Analysis

Table 7. Results of regression models.

Variable	Model A (Total)		Model B (EI)		Model C (NEI)
	B	t (sig)	B	t (sig)	B	t (sig)
Constant	567.26	1.71 (0.09)	1901.14	2.09 (0.04)	310.33	0.89 (0.04)
ECS	1.44	2.82 (0.01 *)	−0.05	−0.06 (0.96)	3.31	4.64 (0.00 *)
AGE	−0.07	−4.71 (0.00 *)	−0.04	−0.75 (0.45)	−0.09	−5.61 (0.00 *)
LEV	0.02	9.70 (0.00 *)	0.02	8.61 (0.00 *)	−0.18	−5.36 (0.00 *)
SIZE	0.62	5.70 (0.00 *)	0.33	1.18 (0.24)	0.83	6.86 (0.00 *)
YEAR	−0.22	−1.71 (0.09)	−0.74	−2.09 (0.04)	−0.12	−0.90 (0.03)
R Square	0.05		0.12		0.04
Adj. R Square	0.05		0.12		0.04
F-value (s)	31.40 (0.00 *)		16.20 (0.00 *)		22.33 (0.00 *)
n	3179		583		2596

* p < 0.05

and Figure 2 present the regression results derived from the multiple regression models. Regression model A was developed to examine the impact of the level of energy conservation disclosure on a firm's performance among Thai-listed firms. To separately examine the impact of energy-intensive and non-energy-intensive industries on firm performance, regression models B and C were developed, respectively. As shown in Table 7, all multiple regression models indicate significant explanatory power of the return on assets (ROA) (p < 0.05). The adjusted R squares of models A, B, and C were 0.05, 0.12, and 0.04, respectively. Thus, the results statistically support the significance of the models.

The results in model A indicated that the coefficient of ECS was positive and significant at the 0.05 level for ROA, implying that energy conservation disclosure has a positive impact on firm performance. Concerning energy-intensive industries firms, the reported results in model B demonstrated that the coefficient of ECS was positive but insignificantly associated with ROA. This result revealed that the financial performance of energy-intensive industry firms did not improve through energy conservation disclosure. Concerning non-energy intensive industries firms, as can be seen in model C, the coefficient of ECS was positively and significantly associated with ROA at the 0.05 level, suggesting that for firms in non-energy intensive industries, energy conservation disclosure had a significant impact on firm performance. Regarding the control variables included in the models, firm age (AGE) was negatively and significantly associated with ROA at 0.05 level in models A and C. Leverage (LEV) was reported to have a positive and significant association with ROA at 0.05 level in model A and B, while the negative and significant association with ROA at 0.05 level in model C. Firm size (SIZE) indicated a significant and positive association with ROA at the 0.05 level only in models A and C. However, the firm year (YEAR) was not significantly associated with ROA in all models.

It was found that ECS has a positive impact on firm performance among Thai-listed companies. In other words, companies that effectively imply their energy conservation typically have higher firm performance. This is consistent with the findings of prior studies, which showed that energy efficiency improvements helped to enhance corporate performance [1,55,56,57]. However, when separately examining such impact by dividing companies into energy-intensive and non-energy-intensive industries, the results revealed that energy conservation had a positive effect on the firm performance of non-energy-intensive industries, while no significant impact was found in energy-intensive industries. At the same time, for companies in non-energy-intensive industries which are expected to lack in energy conservation, energy conservation is an excellent way to demonstrate that protecting the environment is a priority, and it will lead to improved performance.

These findings are congruent with a study by Lu et al. [23], which compared the effects of carbon disclosures on firm performance by dividing companies into carbon-intensive and carbon-non-intensive industries. They found that carbon disclosure has a positive impact on firm performance only among the carbon-non-intensive group. This implies that if companies perform the expected actions, this may not affect the firm performance. On the other hand, for the less expected group, any unanticipated actions would be viewed as outstanding operations and positively impact corporate performance.

4.4. Robustness Test

In addition to ROA, return on equity (ROE) as an accounting measurement is considered one of the best measurements for assessing a firm's performance. Thus, this study conducted an additional analysis to examine the effect of energy conservation disclosure on ROE. When the ROE is used as an explanatory variable for financial performance, it is expected that the regression result of ROE will be consistent with ROA. The results of the robustness test of the three models are reported in

Table 8. Robustness test results.

Variable	Model A (Total)		Model B (EI)		Model C (NEI)
	B	t (sig)	B	t (sig)	B	t (sig)
Constant	1555.43	1.78 (0.08)	982.50	0.44 (0.66)	1707.64	1.80 (0.07)
ECS	2.81	2.09 (0.04 *)	2.25	1.10 (0.27)	4.25	2.20 (0.03 *)
AGE	−0.04	−1.10 (0.27)	−0.00	−0.03 (0.98)	−0.07	−1.61 (0.11)
LEV	−0.01	−1.07 (0.29)	−0.00	−0.78 (0.44)	−0.18	−1.98 (0.05)
SIZE	1.36	4.74 (0.00 *)	1.15	1.64 (0.10)	1.62	4.95 (0.00 *)
YEAR	−0.61	−1.79 (0.07)	−0.39	−0.44 (0.66)	−0.67	−1.81 (0.07)
R Square	0.01		0.01		0.01
Adj. R Square	0.01		0.01		0.01
F-value (s)	6.86 (0.00 *)		1.06 (0.38)		7.48 (0.00 *)
n	3172		583		2589

* p < 0.05

. As indicated in Table 8, the results from the regression models (A, B, and C) indicated the significant explanatory power of firm performance measured by ROE (0.05) for models A and C only. The adjusted R square of models A and C was 0.01, suggesting that disclosure of energy conservation was associated with firm performance measured by ROE. Regression results concerning the full sample indicated that the coefficient of (ECS) was positive and significant at the 0.05 level for ROE. For energy-intensive-industry firms, the regression result of model B indicated that the coefficient of energy conservation disclosure was positive but insignificant. In non-energy intensive-industries firms, the coefficient of (ECS) was positively and significantly associated with ROE at the 0.05 level. This result is largely similar to the results of ROA shown in Table 7. Finally, regarding the control variables, only the coefficient of firm size (SIZE) was positive and significant at the 0.05 level for ROE in models A and B. The results of the robustness test are in line with Horváthová [72]’s findings. It was found that the results remain unchanged when the ROE is used instead of ROA as the proxy of firm performance.

5. Conclusions

To answer the main research questions underpinning the study, the results show that:

1. Energy conservation score of Thai listed companies recorded 0.45 average scores which had been slightly fluctuating from 0.45 to 0.46 average scores during 2016 to 2020;

2. The energy conservation scores of companies in the energy-intensive industries with 0.55 average scores were significantly higher than companies in the non-energy-intensive industries, with 0.43 average scores (t = 8.893, sig = 0.000). Therefore, H1 is supported;

3. The energy conservation score had a significantly positive influence on firm performance among listed companies in Thai capital markets at a 0.01 level. In other words, the companies which are higher on their energy conservation score typically had higher firm performance than a lower score of energy conservation. Thus, H2 is supported when data from all of the companies are taken into account.

However, when separately examining the impact of energy conservation on firm performance in each energy-intensive industry and non-energy-intensive industry, the findings revealed that energy conservation had a positive effect on the performance of listed companies in the non-energy-intensive industry at 0.01 level. In comparison, no significant impact of energy conservation score on Thai firm performance was found in the energy-intensive industry at 0.05 level.

6. Contributions and Implications

This study provides several theoretical and practical contributions and implications. Theoretically, this study's results demonstrate that stakeholder theory and legitimacy theory can explain the impact of energy conservation on firm performance in Thailand, similar to their application in other countries. This is because companies in the energy-sensitive industry have high energy conservation scores in response to stakeholder demands and social expectations. Therefore, stakeholder demands and societal expectations compel corporations to act to demonstrate that such expectations are taken into account. Furthermore, the study sheds light on the impact of energy conservation on firm performance in Thailand.

In terms of practical contributions, this study's findings benefit the government, regulators and policymakers, the companies, and stakeholders. The findings of this study offer mechanisms for the government, regulators, and policymakers to encourage sustainable development of businesses to run on energy in developing countries, especially Thailand, as well as developed countries. Moreover, energy conservation in Thailand can lead to developing adequate regulations or standards through Thai policymakers. For companies, particularly in Thailand, the results can guide them to pay attention to energy conservation because it benefits them in terms of higher firm performance. Nevertheless, for companies in energy-intensive industries whose energy conservation does not have a positive effect on firm performance, they may need to perform additional energy conservation practices. Finally, stakeholders benefit from the results of this study because if corporate actions and activities are implemented to serve stakeholder demands and social expectations, it will lead to (1) sustainable development and (2) a balance between economic, environmental, and social perspectives.

7. Limitations and Suggestions for Future Study

There are some limitations to this study. Firstly, the study did not collect information on the other proxies of energy conservation and firm performance. Secondly, there are other firm characteristic variables that are not used in this study, such as ownership structure, board composition, and auditor type. Finally, as this study was limited to a single country, its conclusions may not apply to other countries. Therefore, to address the limitations of this study, future studies can collect data on other energy conservations and firm performance proxies by using more diverse samples in the Asian region.