The Effect of Environment, Social, Governance (ESG) Score on the Performance of Banking Companies Listed on the Indonesia Stock Exchange

Abstract

The purpose of this research is to investigate how company performance is influenced by ESG disclosure. Using a sample of 10 companies in the financial sector listed on the Indonesia Stock Exchange for the years 2020-2023, the sample was selected using purposive sampling technique. The analysis technique used is multiple regression analysis and employs two control variables for financial performance measured by ROE and ROA, the dependent variable for company performance measured by Tobin’s Q, and the independent variable measured by ESG score. The research results indicate that ESG disclosure impacts company performance. Further analysis reveals that the control variable ROA has a positive effect and the control variable ROE has a negative effect on company performance.

Keywords: ESG, ROA, ROE, Tobin’s Q