The Effect of Environmental, Social, and Governance (ESG) Disclosure on Market Value With Company Financial Performance As A Mediatıng Variable (Case Study of Banking Sector Companies Listed on The Indonesia Stock Exchange for the Period 2019-2023)
Main Article Content
Siti Khotimah*
Neni Maryani
The increase in awareness of environmental, social, and governance (ESG) factors is prompting companies to incorporate ESG principles into their business practices, especially in the banking industry, which plays a crucial role in the financial system. This research seeks to explore how ESG disclosure affects a company's market worth, with financial performance acting as a key mediator. The inspiration for this study arises from contradictory results regarding the relationship between ESG and market value in the Indonesian banking sector. In this research, a quantitative method was employed to examine data from the annual and sustainability reports of banking institutions listed on the Indonesia Stock Exchange (IDX) between 2019 and 2023. The researchers carefully selected their sample using a specific technique and ended up with 44 data points to analyse after removing any outliers. They utilised the Global Reporting Initiative (GRI) guidelines to evaluate ESG disclosure, Tobin's Q to estimate market value, and Return on Assets (ROA) to measure financial performance. The study included the use of simple linear regression and the Sobel test for mediation analysis. The results of their study indicated that ESG disclosure has a significant, positive effect on both market value and financial performance. Moreover, financial performance was found to positively influence market value and act as a mediator in the link between ESG disclosure and market value. These findings suggest that effective ESG disclosure can boost investor confidence by improving financial performance, ultimately leading to a positive impact on the company's market value.
Akerlof, G. A. (2002). Behavioral macroeconomics and macroeconomic behavior. American Economic Review, 92(3), 411–433.
Arrow, K. J. (1974). Essays in the theory of risk-bearing. North-Holland Amsterdam.
Baran, M., Kuźniarska, A., Makieła, Z. J., Sławik, A., & Stuss, M. M. (2022). Does ESG reporting relate to corporate financial performance in the context of the energy sector transformation? Evidence from Poland. Energies, 15(2), 477.
Bătae, O. M., Dragomir, V. D., & Feleagă, L. (2020). Environmental, social, governance (ESG), and financial performance of European banks. Accounting and Management Information Systems, 19(3), 480–501.
Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management. Cengage Learning.
Buallay, A. (2019). Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality: An International Journal, 30(1), 98–115.
Choi, T. H., & Jung, J. (2008). Ethical commitment, financial performance, and valuation: An empirical investigation of Korean companies. Journal of Business Ethics, 81(2), 447–463.
Chouaibi, S., Rossi, M., Siggia, D., & Chouaibi, J. (2021). Exploring the moderating role of social and ethical practices in the relationship between environmental disclosure and financial performance: Evidence from ESG companies. Sustainability, 14(1), 209.
Damayanti, H. E., & Retnani, E. D. (2024). Pengaruh profitabilitas, struktur modal, dan keputusan investasi terhadap nilai perusahaan. Jurnal Ilmu Dan Riset Akuntansi (JIRA), 13(4).
Efendioglu, A. M., & Karabulut, A. T. (2010). Impact of strategic planning on financial performance of companies in Turkey. International Journal of Business and Management, 5(4), 3.
Fakhriansyah, M., Septyani, D., & Reza, K. M. F. (2025). Pengaruh Pengungkapan ESG Terhadap Nilai Perusahaan. Jurnal Ekonomi, Manajemen, Akuntansi Dan Keuangan, 6(1).
Fu, L., Singhal, R., & Parkash, M. (2016). Tobin’s q ratio and firm performance. International Research Journal of Applied Finance, 7(4), 1–10.
Hermawan, M., & Mulyawan, S. (2014). Profitability and corporate social responsibility: An analysis of Indonesia’s listed company. Asia Pacific Journal of Accounting and Finance, 3(1).
Ionescu, G. H., Firoiu, D., Pirvu, R., & Vilag, R. D. (2019). The impact of ESG factors on market value of companies from travel and tourism industry. Technological and Economic Development of Economy, 25(5), 820–849.
Jones, R., & Murrell, A. J. (2001). Signaling positive corporate social performance: An event study of family-friendly firms. Business & Society, 40(1), 59–78.
Junaidi, W., & Hanggraeni, D. (2024). Revealing The Impact of ERM and ESG Disclosures on The Performance of Non-Financial Public Companies in Indonesia: An Empirical Study From 2017-2022. Eduvest-Journal of Universal Studies, 4(11), 10847–10857.
Junius, D., Adisurjo, A., Rijanto, Y. A., & Adelina, Y. E. (2020). The impact of ESG performance to firm performance and market value. Jurnal Aplikasi Akuntansi, 5(1), 21–41.
Masruroh, A. (2019). Pengaruh Pengungkapan Tanggung Jawab Sosial terhadap Nilai Perusahaan pada Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia. Universitas Negeri Malang.
Nuradawiyah, A., & Susilawati, S. (2020). Analisis faktor-faktor yang mempengaruhi nilai perusahaan. Jurnal Akuntansi, 9(2), 218–232.
Nurlatifah, S., Widyastuti, T., & Ahmar, N. (2025). Nexus Of ESG Dısclosure, Sustaınabılıty Performance And Fınancıal Performance On Fırm Value: The Role Of Corporate Reputatıon And Sustaınabılıty Reportıng Qualıty. Financial & Credit Activity: Problems of Theory & Practice, 3(62).
Octavio, M. F. R., Setiawan, D., Aryani, Y. A., & Arifin, T. (2025). The relationship between corporate governance and sustainability performance: the moderating role of public attention. Asian Review of Accounting.
Oncioiu, I., Popescu, D.-M., Aviana, A. E., Șerban, A., Rotaru, F., Petrescu, M., & Marin-Pantelescu, A. (2020). The role of environmental, social, and governance disclosure in financial transparency. Sustainability, 12(17), 6757.
Pramisti, A. A., & Istiqomah, D. F. (2024). the Influence of Environmental Social Governance (Esg) on Company Value With Financial Performance As a Mediation Variable. The Influence Of Environmental Social Governance (ESG) On Company Value With Financial Performance As A Mediation Variable.
Putra, A. K., Junus, O., Masiaga, N., Abdullah, J., & Saprudin, S. (2025). The Influence Of Sustaınabılıty Performance On The Value Of Bankıng Companıes Lısted On The Indonesıa Stock Exchange. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 9(2), 609–624.
Safriani, M. N., & Utomo, D. C. (2020). Pengaruh Environmental, Social, Governance (ESG) Disclosure Terhadap Kinerja Perusahaan. 9, 1–11.
Sugiyono. (2013). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta.
Sunaryo, D. (2025). Financial Ratios and Stock Return in The Food & Beverage Sector. Jurnal Studi Manajemen Organisasi, 22(1).
Utomo, A. S., & Maharani, K. P. (2023). The Effect of Profitability and Liquidity on Company Value Empirical Study of Telecommunication Companies Listed on the IDX. International Journal of Seocology, 79–87.
Zhou, G., Liu, L., & Luo, S. (2022). Sustainable development, ESG performance and company market value: Mediating effect of financial performance. Business Strategy and the Environment, 31(7), 3371–3387.
Zyznarska-Dworczak, B. (2022). Financial and ESG reporting in times of uncertainty. Zeszyty Teoretyczne Rachunkowości, 46, 161–180.
