Environmental, Social and Governance on Market Value: Evidence From Indonesia Market

Abstract

This study examines the impact of Environmental, Social, and Governance (ESG) factors on the market value of Indonesian publicly listed companies. The study was conducted on the companies listed on the IDX that received ESG assessments from LSEG Refinitiv. Based on these criteria, 99 companies received ESG scores in 2022-2023. Market value was assessed from data obtained from the financial reports by measuring Tobin’s Q value. Data analysis was performed using multiple regression analysis. The results indicate that environmental and governance factors have a significant positive effect on market value. Social factors do not affect the market value significantly. A limitation of this study is the limited number of companies that received assessments from LSEG Refinitiv. It is hoped that further research can explore other indicators to measure ESG scores and can add variables such as company size as moderating variables.