ENVIRONMENTAL, SOCIAL, AND GOVERNMENT (ESG) AND FINANCIAL PERFORMANCE: THE MODERATING ROLE OF SLACK RESOURCES Nur Khusniyah Indrawati1 Nuraini Desty Nurmasari2 A Muhamad Jazuli3
1 2 3 Department of Management, Faculty of Economics and Business, Universitas Brawijaya,
Malang, Jawa Timur, Indonesia
Abstract
This study investigates the connection between financial performance (FP) and environmental, social, and governance (ESG) factors in aggregate and individual dimensions from 2016 to 2022. This study also estimates the moderating effect of slack resources in the relationship between ESG and financial performance. The research samples contain 32 corporations implementing ESG from 2016 to 2022 consecutively. The analysis research used panel regression analysis pooled OLS, fixed effects (FE), or random effects (RE). The result shows that ESG Score performance (aggregate) does not influence financial performance. For the individual investigation, environmental performance scores of corporations have a slightly negative significant relationship with ROA. In addition, the study^s results provide evidence that slack resources have a positive moderating impact on the association between aggregate ESG and firm performance (FP). The findings contribute to the existing ESG knowledge by investigating the relationship between ESG-CFP and moderating effect of slack resources.
Keywords: Environmental- Social- Governance- ESG- Financial performance- Slack Resource- Indonesia
