The impact on environmental, social, and governance performance on the financial performance, firm value, and stock returns of the publicly listed firms at Indonesia stock exchange during covid-19 pandemic era

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Silitonga, Rovician Angeline (2021) The impact on environmental, social, and governance performance on the financial performance, firm value, and stock returns of the publicly listed firms at Indonesia stock exchange during covid-19 pandemic era. Undergraduate thesis, IPMI Business School.

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Abstract

The phenomenon of this research is the evident that occurred during the pandemic era where we would see the resilience and out performance of the environmental, social, and governance (ESG) investing. Covid-19 pandemic era had a significant impact on healthcare systems, individual livelihoods, and the stability of nearly all global markets and economies. It was the continued interest in ESG issues that drives sustainable fund assets up to 19% or over USD 2 trillion by the end of the first quarter of 2021. Evidently, the out performance of global sustainable fund flows reached the highest in four quarters in a row. Although ESG performance appeared to impact company performance positively in countries outside Indonesia, the following facts needed to be considered. Bumi global karbon discovered from the sustainability reporting that the ESG disclosure score of 39 publicly listed Indonesian companies are below 30% for year 2018 and 2019. In addition, recent ESG score data released by refinitiv, indicated that 19 companies have satisfactory ESG score, 9 companies have good score, 7 companies have poor score and only 4 companies have excellent score. Thus the objective of this rresearch is to find the empirical evidence on the impact of ESG performance to financial performance, firm value, and stock returns of the Indonesian publicly listed firms during the Covid-19 pandemic era (2020) along with two years before pandemic 2018 and 2019. Then, financial ratios are used to support the variables of interest. This research is using Eviews version 12 for econometric analysis. Based on the results in this research, there was no empirical evidence found that ESG performance positively affect financial performance, firm value, and stock returns. Recommendations given for further research were to construct ESG portfolios according to the size of the company, to understand the circumstances in which businesses integrate social and environmental problems into their business model, and to find the empirical evidence of the moderation of CEO power between ESG performance to financial performance.

Item Type: Thesis (Undergraduate)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Thesis > Master of Business Administration
Depositing User: Dede Faujiah
Date Deposited: 28 Jan 2022 08:29
Last Modified: 28 Jan 2022 08:29
URI: http://repository.ipmi.ac.id/id/eprint/1386

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