Does ESG Disclosure Impact Firm Value: Evidence for Companies in Indonesia
Hendi Rohendi and Yeti Apriliawati

Politeknik Negeri Bandung

Abstract

This quantitative study examines the impact of Environmental, Social, and Governance (ESG) disclosure on firm value. It employed secondary data. The population comprises companies in Indonesia listed on the Indonesia Stock Exchange within the period 2015-2022. The sampling used purposive sampling method. The research sample consisted of 51 companies in Indonesia with a total of 357 observations. Furthermore, the data was estimated using panel econometric techniques including pooled ordinary least square (OLS), fixed effect model, and random effect model using Eviews 12. The findings confirm that ESG disclosure and environmental disclosure pillars have a positive and significant impact on firm value. Meanwhile, the social disclosure pillar and governance pillar have no effect on firm value. This study has two contributions. First, by disclosing ESG, stakeholders and investors will respond positively, thus having an impact on better firm value. Second, the study explains the importance of ESG disclosure for companies because it has an impact on increasing firm value.

Keywords: ESG Disclosure, Firm Value, Size, Leverage

Topic: Sustainable development