Companies in oil palm industry are facing an increasing global attention. Firstly, due to the increase global demand for their products (oils and fats), and secondly, due to the negative effect of their operation towards the environment[1]. Understanding the nature of environment performance of companies in this industry is very important because past studies highlight the possible wealth creation of companies that take care of the environment and society. Companies that take care of the environment and operate in good environment management practices create value that beneficial to shareholders and stakeholders. Additionally, the corporate governance (CG) mechanisms practiced is another key element that lead and control the performance of a business. Therefore, it is important to investigate the role of environmental performance and CG towards companies’ value creation especially in an environmentally sensitive industry such as oil palm industry. Therefore, the objective of this study is to investigate the role of environmental performance and corporate governance towards companies’ value creation in palm oil industry in Malaysia. Sample of this study includes all companies in palm oil industries, listed on the Main Board of Bursa Malaysia. Environmental performance is measured based on the severity of environmental problems caused by the companies based on the data provided by the Department of Environment (DOE) in Malaysia. Companies’ value will be measured based on the accounting and market data. The corporate governance mechanism variable will be developed based on corporate governance characteristic as stated in the Malaysia Code of Corporate Governance (2001, 2007 and 2012). Multiple regressions will be used to analyses the data. The findings of research are helpful for top management of companies in considering the significant role of environmental performance and corporate governance to improve companies’ value.

[1] For every metric ton of palm oil produced, 2.5 metric tons of effluents are generated from processing the palm oil in mills. Direct release of this effluent can cause freshwater pollution, which can affect downstream biodiversity and people.