IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v8y2024i3p2868-2876.html
   My bibliography  Save this article

The Impact of Environment Social Governance (ESG) Performance on Stock Returns in Indonesian Companies

Author

Listed:
  • Rieke Pernamasari

    (Faculty of Economics and Business, Universitas Mercu Buana. Jakarta)

  • Rista Bintara

    (Faculty of Economics and Business, Universitas Mercu Buana. Jakarta)

  • Yuni Rosdiana

    (Faculty of Economics and Business, Universitas Islam, Bandung.)

  • Helliana

    (Faculty of Economics and Business, Universitas Islam, Bandung.)

Abstract

The aim of this research is to examine the performance of Environmental, Social, and Governance (ESG) on the stock return value of companies in Indonesia. This study falls under the third step of measurement, which is the proof-of-concept of important functions and/or characteristics through analytical and experimental methods. The research methodology uses a quantitative approach with a combined time series and cross-sectional data (panel data). Data collection is done using secondary data, where data is gathered from existing sources. In this study, the data is obtained from Bloomberg. The population for this research comprises companies listed on the Indonesian Stock Exchange with available ESG disclosure scores on Bloomberg for the period of 2017-2021. Based on the hypothesis test results, it is found that ESG performance and social performance have a positive effect on stock returns. However, the performance of governance and the environment, has no effect on stock returns.

Suggested Citation

  • Rieke Pernamasari & Rista Bintara & Yuni Rosdiana & Helliana, 2024. "The Impact of Environment Social Governance (ESG) Performance on Stock Returns in Indonesian Companies," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3), pages 2868-2876, March.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:3:p:2868-2876
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-8-issue-3/2868-2876.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/the-impact-of-environment-social-governance-esg-performance-on-stock-returns-in-indonesian-companies/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Les Coleman & Krishnan Maheswaran & Sean Pinder, 2010. "Narratives in managers’ corporate finance decisions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(3), pages 605-633, September.
    2. Michael V. Russo, 2003. "The emergence of sustainable industries: building on natural capital," Strategic Management Journal, Wiley Blackwell, vol. 24(4), pages 317-331, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feng, Jingwen & Goodell, John W. & Shen, Dehua, 2022. "ESG rating and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 46(PB).
    2. Javier Martínez-del-Río & José Céspedes-Lorente, 2014. "Competitiveness and Legitimation: The Logic of Companies going Green in Geographical Clusters," Journal of Business Ethics, Springer, vol. 120(1), pages 131-146, March.
    3. Kavadis, Nikolaos & Hermes, Niels & Oehmichen, Jana & Zattoni, Alessandro & Fainshmidt, Stav, 2024. "Sustainable value creation in multinational enterprises: The role of corporate governance actors," Journal of World Business, Elsevier, vol. 59(1).
    4. O'Neil, Isobel & Ucbasaran, Deniz, 2016. "Balancing “what matters to me” with “what matters to them”: Exploring the legitimation process of environmental entrepreneurs," Journal of Business Venturing, Elsevier, vol. 31(2), pages 133-152.
    5. Ans Kolk & Jonatan Pinkse, 2012. "Multinational enterprises and climate change strategies," Grenoble Ecole de Management (Post-Print) hal-00835257, HAL.
    6. Karin Andrea Wigger & Dean A. Shepherd, 2020. "We’re All in the Same Boat: A Collective Model of Preserving and Accessing Nature-Based Opportunities," Entrepreneurship Theory and Practice, , vol. 44(3), pages 587-617, May.
    7. Peter Strachan & David Lal, 2004. "Wind Energy Policy, Planning and Management Practice in the UK: Hot Air or a Gathering Storm?," Regional Studies, Taylor & Francis Journals, vol. 38(5), pages 549-569.
    8. Weigelt, Carmen & Lu, Shaohua & Verhaal, J. Cameron, 2021. "Blinded by the sun: The role of prosumers as niche actors in incumbent firms’ adoption of solar power during sustainability transitions," Research Policy, Elsevier, vol. 50(9).
    9. Issaka Dialga, 2017. "Changing the Africa's impoverishing economic model: Towards a rewarding sustainable specialization model with a new factor of production," Working Papers halshs-01500431, HAL.
    10. Jeffrey G. York & Michael J. Lenox, 2014. "Exploring the sociocultural determinants of de novo versus de alio entry in emerging industries," Strategic Management Journal, Wiley Blackwell, vol. 35(13), pages 1930-1951, December.
    11. Manapon Limkriangkrai & SzeKee Koh & Robert B. Durand, 2017. "Environmental, Social, and Governance (ESG) Profiles, Stock Returns, and Financial Policy: Australian Evidence," International Review of Finance, International Review of Finance Ltd., vol. 17(3), pages 461-471, September.
    12. Masini, Andrea & Menichetti, Emanuela, 2012. "The impact of behavioural factors in the renewable energy investment decision making process: Conceptual framework and empirical findings," Energy Policy, Elsevier, vol. 40(C), pages 28-38.
    13. Masini, Andrea & Menichetti, Emanuela, 2013. "Investment decisions in the renewable energy sector: An analysis of non-financial drivers," Technological Forecasting and Social Change, Elsevier, vol. 80(3), pages 510-524.
    14. Bifeng Zhu & Jing Feng & Chaoyang Sun & Zhekai Wang, 2024. "Characteristics and affordability of American universities with a willingness to invest in sustainability," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    15. Welch, Jonathan B. & Venkateswaran, Anand, 2009. "The dual sustainability of wind energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(5), pages 1121-1126, June.
    16. Jeffrey G. York & Isobel O'Neil & Saras D. Sarasvathy, 2016. "Exploring Environmental Entrepreneurship: Identity Coupling, Venture Goals, and Stakeholder Incentives," Journal of Management Studies, Wiley Blackwell, vol. 53(5), pages 695-737, July.
    17. Doblinger, Claudia & Soppe, Birthe, 2013. "Change-actors in the U.S. electric energy system: The role of environmental groups in utility adoption and diffusion of wind power," Energy Policy, Elsevier, vol. 61(C), pages 274-284.
    18. Parente, Ronaldo C. & Baack, Daniel W. & Hahn, Eugene D., 2011. "The effect of supply chain integration, modular production, and cultural distance on new product development: A dynamic capabilities approach," Journal of International Management, Elsevier, vol. 17(4), pages 278-290.
    19. Riehl, Kevin & Kiesel, Florian & Schiereck, Dirk, 2022. "Political and Socioeconomic Factors That Determine the Financial Outcome of Successful Green Innovation," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 132099, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    20. York, Jeffrey G. & Venkataraman, S., 2010. "The entrepreneur-environment nexus: Uncertainty, innovation, and allocation," Journal of Business Venturing, Elsevier, vol. 25(5), pages 449-463, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:8:y:2024:i:3:p:2868-2876. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://www.rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.