Cost of Debt Affecting Sustainability of Listed Companies in the Stock Exchange of Thailand SET ESG Ratings
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Abstract
The objective of this study is to analyze the influence of the cost of debt on three dimensions of sustainability performance: 1) environmental sustainability, 2) social sustainability, and 3) governance sustainability. This research adopts a quantitative approach. The sample comprises 256 companies listed on the Stock Exchange of Thailand (SET) with ESG ratings. Data were collected from financial statements and SET Fin Lab (Bloomberg) covering the period from 2021 to 2023. Multiple regression analysis was employed to examine the relationships. The findings reveal that the cost of debt, as determined by the capital structure, has a significant impact on ESG sustainability performance. Specifically: 1) the cost of debt has a positive impact on environmental and social dimensions; 2) the cost of debt also shows an adverse effect on the social dimension; and 3) the cost of debt positively influences the governance dimension. These results suggest that a well-balanced cost of debt can enhance environmental and social sustainability. Long-term debt facilitates investments in responsible and sustainable activities, while an excessively high level of debt may increase financial risk and negatively affect corporate governance. Effective debt management promotes transparency and strengthens internal control systems, thereby contributing to long-term value creation for the firm.
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