IDEAS home Printed from https://ideas.repec.org/h/spr/advbcp/978-94-6463-817-2_48.html

ESG Factors and Financial Performances: Evidence from Listed Company in Indonesia

In: Proceedings of the 9th Global Conference on Business, Management and Entrepreneurship (GCBME 2024)

Author

Listed:
  • Muhammad Syahrul Ramadhan

    (Universitas Pendidikan Indonesia)

  • Maya Sari

    (Universitas Pendidikan Indonesia)

  • Budhi Pamungkas

    (Universitas Pendidikan Indonesia)

Abstract

The Environmental, Social, and Governance (ESG) framework is a comprehensive instrument to assess an organization’s ethical and sustainable impact. Organizations that perform well in all ESG aspects are considered to be in a good position for success across time because they can manage risks effectively and develop lasting relationships with stakeholders. This study aims to assess whether ESG affects financial performance. The ESG score was employed in this research to evaluate ESG implementation, while the Return on Assets indicator was used to determine financial performance concerning profitability. The subject of the study is 61 listed companies in Indonesia that have been included in the ESG–Based Index in 2020-2023. The Panel Data Regression approach is used in this study to analyze the effect of ESG factors on Profitability. According to the fixed effect model, this research indicates that the ESG score positively impacts profitability performance. Businesses that invest in social projects or sustainable practices with a good strategy can see an immediate impact. However, some companies may not see immediate benefits but can experience long-term advantages such as enhanced reputation, reduced risks, and increased efficiency. These factors contribute to improved profitability over time, demonstrating the long-term financial benefits of ESG activities.

Suggested Citation

  • Muhammad Syahrul Ramadhan & Maya Sari & Budhi Pamungkas, 2025. "ESG Factors and Financial Performances: Evidence from Listed Company in Indonesia," Advances in Economics, Business and Management Research, in: Ratih Hurriyati & Sulastri Sulastri & Lisnawati Lisnawati & Lili Adi Wibowo (ed.), Proceedings of the 9th Global Conference on Business, Management and Entrepreneurship (GCBME 2024), pages 393-399, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-817-2_48
    DOI: 10.2991/978-94-6463-817-2_48
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:advbcp:978-94-6463-817-2_48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.