The Effect of ESG Performance on The Financial Performance of Manufacturing Companies Listed in The Indonesian

Authors

  • Barraq Mellina Zahroh Diponegoro University
  • Hersugondo Hersugondo Universitas Diponegoro

DOI:

https://doi.org/10.47312/ambr.v6i2.475

Keywords:

Environmental Performance, Social Performance, Governance Performance, ESG Performance, Financial Performance

Abstract

This study was conducted to analyze the effect of environmental, social, and governance (environmental, social, and governance (ESG) performance on the company's financial performance. The company's financial performance is proxied by using Return On Assets. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange in the 2015-2019 period. The sampling technique used purposive sampling to obtain a total of 13 manufacturing companies whose annual reports were published on idx.co.id and disclosed environmental, social, and governance scores on Bloomberg. The analytical method used is panel data regression using the E-views 9 program. The results of this study indicate that social performance, governance performance and ESG performance have a positive and significant effect on the company's financial performance while environmental performance has a negative and insignificant effect on the company's financial performance.

Keywords: Environmental Performance, Social Performance, Governance Performance, ESG Performance, Financial Performance.

Downloads

Download data is not yet available.

References

Agustini, R. M., & Gunadarma, U. (2015). Dampak Implementasi RGEC Terhadap Nilai Perusahaan Yang Go Public. Kinerja, 19(2), 126–138.

Alareeni, B. A., & Hamdan, A. (2020). ESG impact on performance of US S & P 500-listed fi rms. 20(7), 1409–1428. https://doi.org/10.1108/CG-06-2020-0258

Buallay, A. (2019). Management of Environmental Quality: An International Journal Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality: An International Journal, 30(1), 98–115.

Buallay, A., Fadel, S. M., Alajmi, J., & Saudagaran, S. (2020). Sustainability reporting and bank performance after fi nancial crisis crisis. https://doi.org/10.1108/CR-04-2019-0040

Carlson, R. S., & Bierman, H. (1966). Financial Accounting Theory. In The Journal of Finance (Vol. 21, Issue 3). https://doi.org/10.2307/2977845

D.R. Hansen & M/M. Mowen. (2018). “Cornerstones of Cost Management,” 4th Edition. Boston: Cengage Learning, 2018.

Danovan, G., & Gibson, K. (2000). Environmental Dislosure in The Corporate Annual Report: A Longitudinal Australian Study Paper For Presentation in The 6th Interdisciplinary Environmental Association Conference”. Monteal, Canada.

De Lucia, C., Pazienza, P., & Bartlett, M. (2020). Does good ESG lead to better financial performances by firms? Machine learning and logistic regression models of public enterprises in Europe. Sustainability (Switzerland), 12(13), 1–29. https://doi.org/10.3390/su12135317

Donaldson, T., & Preston, L. E. (1995). The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications. The Academy of Management Review, 20(1), 65. https://doi.org/10.2307/258887

Gray, R., Kouhy, R., Lavers, S., Gray, R., Kouhy, R., & Lavers, S. (1995). A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal, 8(2), 47–125. https://doi.org/10.1108/09513579510146996%0ADownloaded

Hambrick, D. C. (1986). Upper Echelons : The organization as a reflection of its top managers. ^Academy of Management Review, 9(2), 193–206.

Ismail, W., & Laksito, H. (2020). Pengaruh Lingkup Corporate Sosial Responsibility Terhadap Agresivitas Pajak ( Studi Empiris pada Perusahaan Non Keuangan yang terdaftar di Bursa Efek Indonesia Tahun 2016-2018 ). 9(40), 1–13.

Junius, D., Adisurjo, A., Rijanto, Y. A., & Adelina, Y. E. (2020). the Impact of Esg Performance To Firm Performance and Market Value. Jurnal Aplikasi Akuntansi, 5(1), 21–41. https://doi.org/10.29303/jaa.v5i1.84

Ladyve, G. M., Noor Shodiq Ask, & M. Cholid Mawardi. (2020). Pengaruh Kinerja Lingkungan, Biaya Lingkungan, Dan Ukuran Perusahaan Terhadap Kinerja Keuangan Perusahaan Yang Terdaftar Di Bura Efek Indonesia Tahun 2015 - 2018. E-Jra, 09(06), 1–12.

Mumtazah, F., & Purwanto, A. (2020). Analisis Pengaruh Kinerja Keuangan Dan Pengungkapan Lingkungan Terhadap Nilai Perusahaan. Diponegoro Journal of Accounting, 9(2), 1–11.

Pratiwi, L. N., Kusumastuti, E. D., Nuriasari, S., Akuntansi, J., Negeri, P., Syariah, P., & Audit, K. (2018). Pengaruh Implementasi Tata Kelola Perusahaan terhadap Kinerja Perbankan Syariah yang Terdaftar di Bursa Efek Indonesia. Sigma-Mu, 10, 30–37.

Safriani, M. N dan Utomo, D. C. (2020). Pengaruh Environmental, Social, Governance (ESG) Disclosure terhadap Kinerja Perusahan. Ejournal Undip, 9 Nomor 3, 1–11.

Sitanggang, R. P., & Ratmono, D. (2019). Pengaruh Tata Kelola Perusahaan Dan Pengungkapan Tanggung Jawab Sosial Perusahaan Terhadap Kinerja Keuangan Dengan Manajemen Laba Sebagai Variabel Mediasi. Diponegoro Journal of Accounting, 8(4), 1–15.

Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169–178. https://doi.org/10.1108/jgr-11-2016-0029

Velte, P. (2019). Does CEO power moderate the link between ESG performance and financial performance?: A focus on the German two-tier system. Management Research Review, 43(5), 497–520. https://doi.org/10.1108/MRR-04-2019-0182

Zainab, A., & Burhany, D. I. (2020). Biaya Lingkungan , Kinerja Lingkungan , dan Kinerja Keuangan pada Perusahaan Manufaktur. Industrial Research Workshop and National Seminar, 992–998.

Downloads

Published

2021-12-31

Issue

Section

Articles