Maximizing ESG practices on firm performance evidence from 45 mining companies listed on IDX
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Jun 14, 2023
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Abstract
The purpose of this research is to examine the impact of environmental, social, and governance (ESG) disclosures on corporate performance, utilizing control variables such as financial leverage and total assets. This study's variables include the dependent variable (operational and financial performance), the independent variable (ESG disclosure), and the control variable (financial leverage). This study uses quantitative research methods. This study's population consists of mining businesses listed on the IDX. Purposive sampling was used to collect data. The sample collected using the purposive sampling approach consisted of 45 mining enterprises. Multiple regression analysis was employed in this investigation, which was conducted using SPSS version 25 software. According to the findings of this study, ESG disclosure has a positive and significant impact on operational and financial performance.
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How to Cite
Purwitasari, D., Sumardi, S., Wulandari, R., & Anggraini, F. R. (2023). Maximizing ESG practices on firm performance evidence from 45 mining companies listed on IDX. Enrichment : Journal of Management, 13(2), 1095-1101. https://doi.org/10.35335/enrichment.v13i2.1398
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Nirino, N., Santoro, G., Miglietta, N., & Quaglia, R. (2021). Corporate controversies and company’s financial performance: Exploring the moderating role of ESG practices. Technological Forecasting and Social Change, 162(September 2020), 120341. https://doi.org/10.1016/j.techfore.2020.120341
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Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), 341–350. https://doi.org/10.1016/j.jbusres.2014.06.024
Shakil, M. H., Mahmood, N., Tasnia, M., & Munim, Z. H. (2019). Do environmental, social and governance performance affect the financial performance of banks? A cross-country study of emerging market banks. Management of Environmental Quality: An International Journal, 30(6), 1331–1344. https://doi.org/10.1108/MEQ-08-2018-0155
Tongco, M. D. C. (2007). 5093226. 158, 147–158.
Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169–178. https://doi.org/10.1108/jgr-11-2016-0029
Widiyanti, M., Sadalia, I., Zunaidah, Irawati, N., & Hendrawaty, E. (2019). Determining firm’s performance: Moderating role of csr in renewable energy sector of Indonesia. Polish Journal of Management Studies, 19(2), 432–441. https://doi.org/10.17512/pjms.2019.19.2.37
Yoon, B., Lee, J. H., & Byun, R. (2018). Does ESG performance enhance firm value? Evidence from Korea. Sustainability (Switzerland), 10(10). https://doi.org/10.3390/su10103635
Yu, E. P. yi, Guo, C. Q., & Luu, B. Van. (2018). Environmental, social and governance transparency and firm value. Business Strategy and the Environment, 27(7), 987–1004. https://doi.org/10.1002/bse.2047
Adedoyin, B. O. (2020). Quantitative Research Method Assignment. Near East University, 2013.
Aguinis, H. (2010). Organizational responsibility: Doing good and doing well. APA Handbook of Industrial and Organizational Psychology, Vol 3: Maintaining, Expanding, and Contracting the Organization., 3, 855–879. https://doi.org/10.1037/12171-024
AL-ZOUBI, A. M. (2017). The Extent of Electronic Accounting Information SystemsâTM Ability to Provide Quantitative Indicators of Financial Performance in both Public and Private Universities in Jordan. International Journal of Academic Research in Accounting, Finance and Management Sciences, 7(3). https://doi.org/10.6007/ijarafms/v7-i3/3178
Alareeni, B. A., & Hamdan, A. (2020). ESG impact on performance of US S&P 500-listed firms. Corporate Governance (Bingley), 20(7), 1409–1428. https://doi.org/10.1108/CG-06-2020-0258
Albitar, K., Hussainey, K., Kolade, N., & Gerged, A. M. (2020). ESG disclosure and firm performance before and after IR: The moderating role of governance mechanisms. International Journal of Accounting and Information Management, 28(3), 429–444. https://doi.org/10.1108/IJAIM-09-2019-0108
Ali, W., Frynas, J. G., & Mahmood, Z. (2017). Determinants of Corporate Social Responsibility (CSR) Disclosure in Developed and Developing Countries: A Literature Review. Corporate Social Responsibility and Environmental Management, 24(4), 273–294. https://doi.org/10.1002/csr.1410
Ammarwaty, A., Zulpahmi, & Sumardi. (2021). The Effect of Corporate Social Responsibility on Firm Value with Financial Performance as an Intervening Variable in LQ 45 Companies Index. Proceedings of the 1st Annual International Conference on Natural and Social Science Education (ICNSSE 2020), 547(Icnsse 2020), 58–65. https://doi.org/10.2991/assehr.k.210430.009
Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69(2), 111–132. https://doi.org/10.1007/s10551-006-9071-z
Brogi, M., & Lagasio, V. (2019). Environmental, social, and governance and company profitability: Are financial intermediaries different? Corporate Social Responsibility and Environmental Management, 26(3), 576–587. https://doi.org/10.1002/csr.1704
Brooks, C., & Oikonomou, I. (2018). The effects of environmental, social and governance disclosures and performance on firm value: A review of the literature in accounting and finance. British Accounting Review, 50(1), 1–15. https://doi.org/10.1016/j.bar.2017.11.005
Buallay, A. (2019). Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality: An International Journal, 30(1), 98–115. https://doi.org/10.1108/MEQ-12-2017-0149
Dhista Adi Prabowo, I. D. (2014). Pengaruh Kompensasi dan Pengawasan Pimpinan Terhadap Disiplin Kerja Pegawai pada Dinas Pendapatan,Pengelolaan Keuangan dan Asset Daerah Kabupaten Batang. Diponegoro Journal Of Management, 3, 1–12.
Dornier, R., Selmi, N., & Delécolle, T. (2012). Strategic Groups Structure, Positioning of the Firm and Performance: A Review of Literature. International Business Research, 5(2). https://doi.org/10.5539/ibr.v5n2p27
Ferrero-ferrero, I., Fernández-izquierdo, M. Á., & Muñoz-torres, M. J. (2016). The Effect of Environmental , Social and Governance Consistency on Economic Results. https://doi.org/10.3390/su8101005
Gimeno-Gilles, C., Lelièvre, E., Viau, L., Malik-Ghulam, M., Ricoult, C., Niebel, A., Leduc, N., Limami, A. M., Schmidt-Lebuhn, A. N., Fuchs, J., Hertel, D., Hirsch, H., Toivonen, J., Kessler, M., Loureiro, J., Lavania, U. C. U. C., Srivastava, S., Lavania, S., Basu, S., … Yao, J. L. (2016). No 主観的健康感を中心とした在宅高齢者における 健康関連指標に関する共分散構造分析Title. Euphytica, 18(2), 22280.
Hamrouni, A., Boussaada, R., & Ben Farhat Toumi, N. (2019). Corporate social responsibility disclosure and debt financing. Journal of Applied Accounting Research, 20(4), 394–415. https://doi.org/10.1108/JAAR-01-2018-0020
Haryono, U., & Iskandar, R. (2015). Corporate Social Performance and Firm Value. International Journal of Business and Management Invention ISSN, 4(11), 69–75.
Murthi, S. N. K., Subaki, A., & Sumardi, S. (2021). Pengaruh Pertumbuhan Penjualan, Perputaran Piutang, Perputaran Persediaan, Ukuran Perusahaan Dan Leverage Terhadap Profitabilitas (Studi Pada Perusahaan Sektor Makanan Dan Minuman Yang Terdaftar Di Bursa Efek Indonesia). Ultimaccounting Jurnal Ilmu Akuntansi, 13(2), 271–293. https://doi.org/10.31937/akuntansi.v13i2.2294
Nirino, N., Santoro, G., Miglietta, N., & Quaglia, R. (2021). Corporate controversies and company’s financial performance: Exploring the moderating role of ESG practices. Technological Forecasting and Social Change, 162(September 2020), 120341. https://doi.org/10.1016/j.techfore.2020.120341
Prashar, A. (2021). Eco-efficient production for industrial small and medium-sized enterprises through energy optimisation: framework and evaluation. Production Planning and Control, 32(3), 198–212. https://doi.org/10.1080/09537287.2020.1719714
Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), 341–350. https://doi.org/10.1016/j.jbusres.2014.06.024
Shakil, M. H., Mahmood, N., Tasnia, M., & Munim, Z. H. (2019). Do environmental, social and governance performance affect the financial performance of banks? A cross-country study of emerging market banks. Management of Environmental Quality: An International Journal, 30(6), 1331–1344. https://doi.org/10.1108/MEQ-08-2018-0155
Tongco, M. D. C. (2007). 5093226. 158, 147–158.
Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169–178. https://doi.org/10.1108/jgr-11-2016-0029
Widiyanti, M., Sadalia, I., Zunaidah, Irawati, N., & Hendrawaty, E. (2019). Determining firm’s performance: Moderating role of csr in renewable energy sector of Indonesia. Polish Journal of Management Studies, 19(2), 432–441. https://doi.org/10.17512/pjms.2019.19.2.37
Yoon, B., Lee, J. H., & Byun, R. (2018). Does ESG performance enhance firm value? Evidence from Korea. Sustainability (Switzerland), 10(10). https://doi.org/10.3390/su10103635
Yu, E. P. yi, Guo, C. Q., & Luu, B. Van. (2018). Environmental, social and governance transparency and firm value. Business Strategy and the Environment, 27(7), 987–1004. https://doi.org/10.1002/bse.2047