The role of ESG in the sustainability of palm oil companies in Indonesia and the effect on performance and stock return

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Wahid, Abdurrahman (2023) The role of ESG in the sustainability of palm oil companies in Indonesia and the effect on performance and stock return. Undergraduate thesis, Sekolah Tinggi Manajemen Ipmi.

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Abstract

Plantation sector, especially in the palm oil industry, is a large and growing sector in Indonesia, and is a part of the biggest supplier of palm oil in the world. The Indonesian palm oil industry started to gain attention from both national and international, which demanded that the palm oil industry in Indonesia should comply with environmental, social, and governance (ESG) regulations from the Indonesian government and international organizations. With tighter regulation, there are promised benefits in complying with the ESG. So to analyze whether this benefit exists using already listed in the market for more than five years and have five years of ESG disclosure. This stdy aims to analyze Indonesia's palm oil sector performance using seven Indonesian ESG palm oil companies during 2-17-2021. The methodology used for this study is purposive sampling method is used an eviews statistical tool then financial ratio analysis, CAGR analysis, T-test analysis, and F-test analysis to examine the variables. The financial ratios are profitability, liquidity, operating return, multiples, and leverage. The T-test analysis is designed to find the mean difference between portfolio returns and market returns, while the F-test analysis is intended to find the variance difference. The results of this study show that the returns are statistically equal to market returns but ESG palm oil companies are riskier than the market. ESG palm oil companies show different financial performances but most have good liquidity, multiplier, and leverage. Then poor performance in profitability and operating return.

Item Type: Thesis (Undergraduate)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Thesis > Bachelor of Business Administration
Depositing User: Dede Faujiah
Date Deposited: 06 Apr 2023 08:19
Last Modified: 06 Apr 2023 08:19
URI: http://repository.ipmi.ac.id/id/eprint/1926

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