<![CDATA[This research is motivated by the increasing importance of sustainability issues in the manufacturing sector, where companies are required to align business operations with social and environmental norms to maintain legitimacy. This study aims to examine the effect of Environmental, Social, and Governance (ESG) performance, as proxied by the PROPER rating on profitability, with firm size as a moderating variable. The research focuses on manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2021-2024 period. Using a purposive sampling method, 128 observations from 32 companies were analyzed using Moderated Regression Analysis (MRA). The results show that ESG performance (PROPER rating) has a positive and significant effect on profitability, This finding aligns with the perspective of legitimacy theory, indicating that sustainability commitment can enhance financial performance through increased stakeholder trust. However, firm size is found to significantly weaken the relationship between ESG performance (PROPER rating) and profitability. This suggests that large firms face higher implementation costs and bureaucratic complexity, which can suppress profit margins compared to medium-sized firms. These findings imply that management should prioritize strategic efficiency in ESG performance (PROPER rating) implementation rather than relying solely on asset scale.]]>
Copyrights © 2026
