<![CDATA[Sustainable finance has become an important part of the banking sector's strategy as attention to environmental, social, and governance aspects increases in creating long-term corporate value. This study aims to analyze the influence of sustainable finance, as proxied by Environmental, Social, and Governance (ESG), on firm value, analyze the influence of ESG on profitability and profitability on firm value, and examine the role of profitability as a mediating variable. The study uses a quantitative approach with secondary data sourced from annual reports, sustainability reports, and stock price data of banking companies listed on the Indonesia Stock Exchange for the 2020–2024 period. The sample was determined using a purposive sampling technique, resulting in 10 companies with 50 observations. ESG disclosure was measured using content analysis based on 15 indicators adapted from the 2021 GRI Standards. Profitability was proxied by Return on Assets (ROA), while firm value was proxied by Price to Book Value (PBV). The analysis was conducted using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4. The results showed that ESG has a positive and significant effect on firm value, but not a significant effect on profitability. Profitability has a positive and significant effect on firm value, but does not significantly mediate the relationship between ESG and firm value. These findings suggest that sustainable finance is associated with increased firm value primarily through the direct influence of ESG on market valuation, not through increased profitability.]]>
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