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VOL. 6, ISSUE 4 (2024)
The influence of ESG disclosure on corporate financial performance: Empirical evidence from manufacturing companies in Indonesia
Authors
Ditia Azmii Ayyasy, Shiddiq Nur Rahardjo
Abstract
This study aims to analyse the impact of
environmental, social, and governance (ESG) disclosures on the financial
performance of companies in the manufacturing sector listed on the Indonesia
Stock Exchange for the period 2020-2022. With increasing attention to
sustainability issues, this research explores how ESG elements, affect the
financial performance of companies as measured by Return on Asset (ROA). The
research methodology employed is multiple linear regression analysis using IBM
SPSS 26 software. Secondary data were obtained from the Bloomberg database and
official company websites. The study sample consists of 99 manufacturing
companies selected using purposive sampling. Financial performance was measured
using the ROA indicator, while ESG disclosure was assessed using ESG disclosure
scores sourced from the Bloomberg database. The results indicate a varied
impact of ESG disclosures on the financial performance of companies.
Environmental disclosure is found to significantly contribute to an increase in
ROA, whereas social and governance disclosures do not show a significant
impact. These findings suggest that environmental aspects play an important
role in enhancing a company's financial performance, while social and
governance aspects may require more time to manifest their tangible effects.
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Pages:1-5
How to cite this article:
Ditia Azmii Ayyasy, Shiddiq Nur Rahardjo "The influence of ESG disclosure on corporate financial performance: Empirical evidence from manufacturing companies in Indonesia". International Journal of Commerce and Economics, Vol 6, Issue 4, 2024, Pages 1-5
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