ESG (Environmental, Social And Governance) Memoderasi Kinerja Keuangan Terhadap Nilai Perusahaan

Kusumawardhani, Adhityawati and THENARDI, CLARISSA MAULLIDYA and LUTWAL, ANGELLINA (2023) ESG (Environmental, Social And Governance) Memoderasi Kinerja Keuangan Terhadap Nilai Perusahaan. [UNSPECIFIED]

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Abstract

Environmental social governance (ESG) as a potential catalyst for enhancing the correlation between firm value and financial performance (as measured by ROE, EPS, and DER) is the subject of this study. This study employs multiple linear regression to analyze the research population, which comprises all companies listed on the Indonesia Stock Exchange between 2017 and 2021, excluding those in the financial sector. The research population comprises five years worth of continuous reports obtained from 115 corporations via Refinitiv data and purposive sampling. The initial hypothesis demonstrates the impact on firm value of financial performance metrics (DER and EPS) that have a negative value but exhibit a positive value of ROE. In contrast, the second hypothesis demonstrates that ESG enhancements the impact of negative-valued ROE and positive-valued EPS as surrogates for financial performance on company value, while providing no evidence that ESG has any effect on financial performance as measured by DER. The research outcomes contribute to an augmentation in the value of the company when financial performance is assessed solely through the metrics of ROE, EPS, and DER. This is attributed to the heightened focus of stakeholders on long-term profitability. Organizations that prioritize financial development will command a premium valuation. This study provides support for the legitimacy theory and the Resource Based View (RBV), which explain why businesses must operate responsibly.

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