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Journal : eCo-Buss

ESG Risk and Firm’s Performance Desmy Riani; Muhammad Imam Sundarta; Yuggo Afrianto; Sajaratul Aini
eCo-Buss Vol. 7 No. 1 (2024): eCo-Buss
Publisher : Komunitas Dosen Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.32877/eb.v7i1.1483

Abstract

This study aims to explore the link between market, financial, and operational performance and environmental, social, and governance (ESG) risk. This quantitative study is based on data analysis from up to 100 observations collected between 2019 and 2023. Companies listed on the Indonesia Stock Exchange IDX LQ45 throughout the observation period serve as the study's samples. Purposive sampling was used to choose the sample, and it was done so based on particular research-relevant criteria. The performance of the company is examined in relation to ESG risks using the robust standard errors model. Stakeholder theory, which highlights the significance of corporate management taking into account the interests of all stakeholders, serves as the foundation for the theoretical model of this work. The dependent variables in the practical model are ROA, ROE, and Tobin's Q, whereas the independent variable is the ESG risk rating. The conclusions drawn from the empirical data demonstrate that market and financial performance are significantly harmed by ESG risk. Nonetheless, operational performance is not significantly impacted by ESG risk. This research adds to the limited body of knowledge about the risk associated with sustainability reporting and how it affects a company's capacity to perform financially and on the market. Organizations that effectively handle environmental, social, and governance (ESG) risks can reap enduring advantages such as enhanced standing and stable finances. A crucial first step toward ensuring sustainability and competitiveness in the future is the incorporation of ESG into company strategy.
Co-Authors .S.T., M.Kom., Suhadi Acep Ansor Adhi Prakoso, Bayu Afif Rafyan Agus Rohimat Aidha Zulaika Ajmilah, Wika Alhadi, Ade Andes Andes Angelina, Putri Anggra Triawan Annisa, Sarah Chairul Arief Goeritno Arif Sulistio Aris Kurniawan Yusuf Asep Ramdan Sopyan Nurdin Asep Syaepudin Chaisar Putra, Ivanna Dahlia Widhyaestoeti Dedi Supriadi Desmy Riani Dewi, Kalih Puspita Didik Setiyadi Ebim Fatur Rohman EKO WAHYUDI Enomi Muhamad Giri Salako Fahrezi, Muhamad Rizky Falma, Nuru Fauzan, Ilham Rizq Fety Fatimah Firdaus, Fadhillah Fithri Muliawati Fitria Rachmawati Gibhta Fitri Laxmi Gibtha Fitri Laxmi Ginanjar, Hendra Hadi, Eko Halimatusyadiah, Halimatusyadiah Hannisa Rahmaniar Hasnin Hendrawan, A. Hendri Heru Sukoco Ibnu Hanafi Setiadi Ilma, Neng Indriyawati Indriyawati, Indriyawati Ivanna Chaisar Putra Jejen Jaenudin Jejen Jaenudin Komarudin Kurnia, Annisa Desri Leny Tritanto Ningrum M. Imam Sundarta Mahpulah, Siti Ainun Maswan, Maswan Maulana, Fachry Rizky Muchtar, Kaisha Az Zahra Ningrum, Almyanti Ningrum, Leny Tritanto Novita Br Ginting Nurhayati, Immas Nurzaelani, Mohammad Muhyidin Permana, Arisandi Anwar Prakosa, Bayu Adhi Pratini, Ratna Puspa Eosina Putra Pratama, Saga Eka Putri, Adriani Rianita Putri, Azzahra Safira Sekar Putria, Chairunnisa Melani Rendy Munadi Renea Shinta Aminda Ridhan Anggihadi Prayudha Ridwan Kurniawan Ritzkal, Ritzkal Rizky Amalia Sa'diah, Maemunah Sa'diyah, Maemunah Sajaratul Aini Sarah Chairul Annisa Sayaza, Mas Davino Setyorini Setyorini Setyorini Slamet Riyadi Slamet Riyadi Sonia, Neng Sulaikandi, Brisman Armansyah Suratun Suratun Suratun Suratun Syafrial Syafrial Syaiful . Tazkialaras Tjahjo Tri Hartono Triansyah, Muhammad Bugi Wahjuni, Sri Widyanto, Toto Wulandari, Berlina Yashintya Nelawati Yoga Hardi Firdaus Yoga Permana Yunita Yunita