Proceedings of the 1ST Bengkulu International Conference on Economics, Management, Business and Accounting (BICEMBA 2023)

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Does ESG Initiatives Affect Market Value and Profitability for Public Listed Companies in Indonesia?

Authors
Minaldi Loeis1, *, Dennis Alexander2
1Business Management & Marketing, Binus Business School, Bina Nusantara University, Jakarta, Indonesia
2Mathematics and Statistics Department, School of Computer Science, Bina Nusantara University, Jakarta, Indonesia
*Corresponding author. Email: minaldi@binus.edu
Corresponding Author
Minaldi Loeis
Available Online 21 December 2023.
DOI
10.2991/978-94-6463-328-3_11How to use a DOI?
Keywords
ESG; market value; profitability; Indonesia
Abstract

This study examines 246 listed companies in the Indonesian Stock Exchange (IDX) having reported their economic, social, and governance (ESG) disclosure in 2021with the aim to evaluate whether its ESG initiatives impacted the companies’ market value and profitability. Sustainability investing, specifically based on ESG reporting of public listed companies has reached USD 71.1 billion globally between April and June of 2020. This shows ESG reporting has become an important factor for investors throughout the world. The Indonesian Financial Services Authority (OJK) introduced a circular in 2021 obliging public listed companies to include ESG reporting for their routine reporting to the public and financial authorities. This reporting requirement has increased the number of listed companies in IDX disclosing their ESG activities in 2021. Recent studies of ESG reporting in other markets shows that there is a positive relationship between ESG activities of publicly listed companies and their market value as well as their profitability. Using regression analysis, this study examines the economic, social, and governance disclosed initiatives of the 246 samples of the listed companies and the measure of market value using Tobin’s Q and the measure of profitability using ROA. The findings shows that there are negative relationships between ESG disclosure and market value as well as profitability for listed companies in the IDX. This finding can be beneficial for stakeholders to improve their sustainability strategies and planning to increase the companies’ attractiveness to green investors.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 1ST Bengkulu International Conference on Economics, Management, Business and Accounting (BICEMBA 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
21 December 2023
ISBN
10.2991/978-94-6463-328-3_11
ISSN
2352-5428
DOI
10.2991/978-94-6463-328-3_11How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Minaldi Loeis
AU  - Dennis Alexander
PY  - 2023
DA  - 2023/12/21
TI  - Does ESG Initiatives Affect Market Value and Profitability for Public Listed Companies in Indonesia?
BT  - Proceedings of the 1ST Bengkulu International Conference on Economics, Management, Business and Accounting (BICEMBA 2023)
PB  - Atlantis Press
SP  - 90
EP  - 94
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-328-3_11
DO  - 10.2991/978-94-6463-328-3_11
ID  - Loeis2023
ER  -