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All Journal ARRUS Journal of Social Sciences and Humanities
Erpi Rahman
Akuntansi, Fakultas Ekonomi dan Bisnis, Universitas Sebelas April, Indonesia
Religion Humanities Economics, Econometrics & Finance Law, Crime, Criminology & Criminal Justice Social Sciences

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The Moderating Effect of Profitability on the Impact of ESG Risk Rating on Firm Value: ESG Leaders Index Risa Ratna Gumilang; Erpi Rahman; Dera Pebriyanti Pertiwi
ARRUS Journal of Social Sciences and Humanities Vol. 6 No. 3 (2026)
Publisher : PT ARRUS Intelektual Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.35877/soshum5159

Abstract

Objectives: This study aims to examine the effect of ESG Risk Rating on firm value and to test the moderating role of profitability in this relationship in companies included in the IDX ESG Leaders index for the 2022–2025 period. Methodology: This study applies a quantitative approach with a causal associative design. The sample was selected using purposive sampling, resulting in 18 companies and 72 observations. Data analysis was conducted using Moderated Regression Analysis (MRA) based on secondary data from financial statements, annual reports, and ESG Risk Rating scores. Finding: The results show that ESG Risk Rating has a significant effect on firm value. Profitability, proxied by Return on Equity (ROE), is also found to negatively moderate this relationship, indicating that profitability weakens the effect of ESG Risk Rating on firm value. Conclusion: These findings indicate that ESG risk is relevant information in investors’ valuation decisions, but its influence becomes relatively weaker in firms with higher profitability. The results support stakeholder theory and signaling theory. Keywords: ESG Risk Rating; Firm Value; Profitability; Price to Book Value; Indeks ESG Leaders.
Co-Authors Dera Pebriyanti Pertiwi Risa Ratna Gumilang