ESG (Environmental, Social, Governance) and Company Performance: ESG Guidelines of the Indonesian Ministry of Finance

The implementation of the sustainability concept through Environmental, social, governance (ESG) by companies is an important step to address global challenges related to sustainability issues. The ESG guidelines of the Indonesian Ministry of Finance are one of the efforts made by the Indonesian government to address sustainability issues. Unlike previous studies, this study uses the ESG guidelines in assessing ESG disclosures of Indonesian companies. It is necessary to analyze how the level of ESG disclosure of Indonesian companies based on these guidelines can affect the search for company performance focused on company value, cost of capital and carbon performance. This study aims to analyze the relevance of the implementation and disclosure of Environmental, Social, Governance (ESG) based on these guidelines to company value, cost of capital, and carbon performance. This study uses a random effects model to analyze the relationship between variables with a sample size of 754 (Companies, years). The results show that ESG has a positive and significant effect on company value, ESG has a negative and significant effect on cost of capital, and ESG has a negative and significant effect on carbon performance. This study can explain that stakeholders are more interested in companies that seem to care about sustainability issues. The government needs to strive for more adequate regulations and sanctions to address sustainability issues and also protect stakeholders.