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The Impact of ESG on The Financial, Operational, and Value Performance of Materials Sector Company in Asia Pacific from 2019 to 2023

In: Proceedings of the International Conference on Contemporary Risk Studies (ICONIC-RS 2025)

Author

Listed:
  • Lillianna Ricarda Mettasari

    (Universitas Indonesia, Faculty of Economics and Business)

  • Dewi Hanggraeni

    (Universitas Indonesia, Universitas Pertamina, Faculty of Economics and Business)

Abstract

This study analyzes the impact of Environmental, Social, and Governance (ESG) factors on the financial, operational, and market value performance of materials sector companies in the Asia Pacific region during 2019-2023. Using a quantitative approach with panel data from 128 purposively selected firms, a fixed effect model is applied to assess the influence of overall ESG scores and each pillar on Return on Assets (ROA), Return on Equity (ROE), Tobin’s Q, and Price to Earnings (PE) ratio. The results show that overall ESG scores have a significant negative impact on ROA, ROE, and Tobin’s Q, while the effect on PE is positive but not significant. The environmental pillar shows a consistent negative effect, whereas social and governance pillars have no significant influence. These findings suggest a short-term tradeoff between sustainability efforts and firm performance, and indicate that ESG is not yet fully valued by investors in this sector.

Suggested Citation

  • Lillianna Ricarda Mettasari & Dewi Hanggraeni, 2026. "The Impact of ESG on The Financial, Operational, and Value Performance of Materials Sector Company in Asia Pacific from 2019 to 2023," Advances in Economics, Business and Management Research, in: Eka Puspitawati & Dewi Hanggraeni & Indra Kusumawardhana & Parulian Sihotang & Nanda Nurdianto (ed.), Proceedings of the International Conference on Contemporary Risk Studies (ICONIC-RS 2025), pages 24-37, Springer.
    • Handle: RePEc:spr:advbcp:978-2-38476-595-9_3
    DOI: 10.2991/978-2-38476-595-9_3
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