Competitive Advantage in Moderating the Three Pillars of ESG on Firm Value

The increasing interest of international and domestic investors in recent years has driven investment in Environmental, Social, and Governance (ESG) to become highly attractive The purpose of this research is to examine the performance of Environmental, Social, and Governance (ESG) on the value of companies listed in Indonesia Stock Exchange which competitive advantage as moderating variables. This study employs a quantitative approach using combined time series and cross-sectional data (panel data). The population of this study comprises companies listed on the Indonesia Stock Exchange that have an ESG disclosure score on Bloomberg for the period 2018-2022. The sampling technique used in this research is purposive sampling. The result showed that the implementation of ESG by companies listed on the Indonesia Stock Exchange is still low for environmental and social aspects, whereas corporate governance aspects have been well-implemented, as reflected in relatively high governance scores. Empirically, there is no significant evidence that ESG affects firm value. The low environmental and social performance causes investors to pay less attention, so these factors are not considered in investment decision-making. Competitive advantage can moderate the influence of environmental performance on firm value, indicating that only companies with competitive advantage can enhance the role of environmental performance on firm value.