How ESG Disclosure Shapes Financial Resilience and Market Value of Indonesian Banks?
DOI:
https://doi.org/10.33395/owner.v10i1.2851Keywords:
ESG Disclosure, ROA, PBV, ROE, Financial PerformanceAbstract
The purpose of this study is to investigate the impact of ESG Disclosure on business financial performance, as measured by Return on Assets (ROA), Price to Book Value (PBV), and Return on Equity (ROE). The study’s population comprises all banking companies that were listed on the Indonesia Stock Exchange (IDX) during the 2021–2022 period. The sample was selected using a purposive sampling technique based on the criteria of Sustainability Report availability and complete financial data, yielding a total of 92 panel data observations. The research method is quantitative, utilizing Pearson correlation and simple regression analysis. The results show that ESG Disclosure has a beneficial and statistically significant impact on ROE (p = 0. 0164), but not on ROA (p = 0.1161) or PBV (p = 0. 3187). These findings indicate that the financial impact of ESG disclosure is selective, where the benefits are more evident in shareholder-oriented performance rather than in asset efficiency or market valuation. The results highlight the importance of ESG transparency for enhancing investor confidence and sustainable financial growth in the Indonesian banking sector. These findings provide valuable insights for regulators and policymakers to strengthen ESG reporting standards and for investors to integrate sustainability information into financial decision-making.
Downloads
References
Al-Hiyari, A., & Kolsi, M. C. (2024). How do stock market participants value ESG performance? Evidence from Middle Eastern and North African Countries. Global Business Review, 25(4), 934–956.
Al-Tarawneh, A., Tayeh, M., Iskandrani, M., & Obeidat, M. (2024). The impact of ESG scores on corporate financial performance: A study of non-financial firms listed in the UK. Asian Economic and Financial Review, 14(11), 852.
Alareeni, B. A., & Hamdan, A. (2020). ESG impact on performance of US S&P 500-listed firms. Corporate Governance, 20(7), 1409–1428. https://doi.org/https://doi.org/10.1108/CG-06-2020-0258
Ali, N. B. M., Ali Hussin, H. A. A., Mohammed, H. M. F., Mohmmed, K. A. A. H., Almutiri, A. A. S., & Ali, M. A. (2025). The Effect of Environmental, Social, and Governance (ESG) Disclosure on the Profitability of Saudi-Listed Firms: Insights from Saudi Vision 2030. Sustainability (Switzerland), 17(7), 1–25. https://doi.org/10.3390/su17072977
Alnor, N. H. A. (2024). Corporate Governance Characteristics and Environmental Sustainability Affect the Business Performance among Listed Saudi Company. Sustainability (Switzerland), 16(19). https://doi.org/10.3390/su16198436
Alshareef, M. (2024). CEE920151AEE47D28C8A3CA4FA145D2.
An, H., Ran, C., & Gao, Y. (2025). Does ESG information disclosure increase firm value? The mediation role of financing constraints in China. Research in International Business and Finance, 73, 102584.
Ariyanti, I., Mayasari, R., Febriantoko, J., Harbi, J., Prima, F. H., Lidya, D., Masnila, N., & Sunardi, -. (2024). The Influence of Agrosilvopasture Implementation and MSME Incubation on SDGs with Financial Literacy Mediation in Rural Areas of Indonesia. Agro Ekonomi, 35(1), 78. https://doi.org/10.22146/ae.90222
ASLAN-ÇET?N, Filiz, ÖZTÜRK, Seyhan, AKARSU, & Nuri, O. (2024). The Effect of ESG Data of Companies on Financial Performance: A Panel Data Analysis on The BIST Sustainability Index. 32(61), p125. https://doi.org/10.17233/sosyoekonomi.2024.03.07
Aydo?mu?, M., Gülay, G., & Ergun, K. (2022). Impact of ESG performance on firm value and profitability. Borsa Istanbul Review, 22, S119–S127. https://doi.org/https://doi.org/10.1016/j.bir.2022.11.006
Barman, S., & Mahakud, J. (2025). Assessing the impact of policy uncertainty, geopolitical risk, and sustainable disclosure on corporate performance. Asia-Pacific Financial Markets, 32(1), 167–203.
Biørn, E. (2015). Panel data dynamics with mis-measured variables: Modeling and GMM estimation. Empirical Economics, 48(2), 517–535.
Boonlert-U-Thai, K. (2022). Value relevance of book values, earnings, and future earnings: evidence by time, life cycle stage, and market uncertainty Available to Purchase. Asian Review of Accounting Phiilipp Schraberl, 30(5), 648–668. https://doi.org/https://doi.org/10.1108/ARA-03-2022-0070
Chu, H.-L., Liu, N.-Y., & Chiu, S.-C. (2023). CEO power and CSR: the moderating role of CEO characteristics. China Accounting and Finance Review, 25(1), 101–121. https://doi.org/10.1108/cafr-03-2022-0027
Chung, R., Bayne, L., & Birt, J. (2024). The impact of environmental, social and governance (ESG) disclosure on firm financial performance: evidence from Hong Kong. Asian Review of Accounting, 32(1), 136–165. https://doi.org/10.1108/ARA-07-2022-0165
Cordeiro, J. J., Galeazzo, A., & Shaw, T. S. (2023). The CSR–CFP relationship in the presence of institutional voids and the moderating role of family ownership. Asian Business and Management, 22(1), 137–163. https://doi.org/10.1057/s41291-021-00157-z
Ebaid, I. E.-S. (2022). Nexus between corporate characteristics and financial reporting timelines: evidence from the Saudi Stock Exchange. Journal of Money and Business, 2(1), 43–56. https://doi.org/10.1108/jmb-08-2021-0033
Fan, K. Y., Shen, J., Hui, E. C. M., & Cheng, L. T. W. (2024). ESG components and equity returns: Evidence from real estate investment trusts. International Review of Financial Analysis, 96, 103716.
Febriantoko, J., Sari, K. R., & Armaini, R. (2025). Peran Pengungkapan ESG dalam Meningkatkan Nilai Perusahaan dan Kinerja Keuangan di Sektor Perhotelan Indonesia: Moderasi Ukuran dan Usia Perusahaan. Owner: Riset Dan Jurnal Akuntansi, 9(2), 1033–1048.
Gutiérrez-Ponce, H., & Wibowo, S. A. (2023). Do sustainability activities affect the financial performance of banks? The case of Indonesian banks. Sustainability, 15(8), 6892.
Hermansyah, F. I., Anwar, A. I., Aksah, N. M., Ulumuddin, I., Jannah, R. T., Amaliah, N. R., & Arifin, A. H. (2025). Does poor ESG performance still drive profitability? New evidence from Indonesia’s SRI-KEHATI listed firms. Investment Management and Financial Innovations, 22 (3), 14-26.
Hussain, M. A., Alsayegh, M. F., & Boshnak, H. A. (2024). The impact of environmental, social, and governance disclosure on the performance of saudi arabian companies: Evidence from the Top 100 Non-Financial Companies Listed on Tadawul. Sustainability, 16(17), 7660.
Jeyhunov, A., Kim, J. D., & Bae, S. M. (2025). The Effects of Board Diversity on Korean Companies’ ESG Performance. Sustainability (Switzerland), 17(2), 1–26. https://doi.org/10.3390/su17020787
Khamisu, M. S., & Paluri, A. R. (2025). What’s past is prologue: reminiscing research on environment social governance (ESG) disclosures. International Journal of Disclosure and Governance, 22(2), 320–340.
Li, L., Saat, M. M., Khatib, S. F. A., Chu, P., & Sulimany, H. G. H. (2024). Navigating the impact: A comprehensive analysis of ESG disclosure consequences through systematic review. Business Strategy & Development, 7(2), e382.
Liu, L., & Tian, G. G. (2021). Mandatory CSR disclosure, monitoring and investment efficiency: evidence from China. Accounting and Finance, 61(1), 595–644. https://doi.org/10.1111/acfi.12588
Maji, S. G., & Lohia, P. (2024). Unveiling the financial effect of ESG disclosure on financial performance in India: climate-sensitive corporates’ perspective. International Journal of Ethics and Systems.
Marcon Nora, G. A., Alberton, A., & Ayala, D. H. F. (2023). Stakeholder theory and actor-network theory: The stakeholder engagement in energy transitions. Business Strategy and the Environment, 32(1), 673–685. https://doi.org/https://doi.org/10.1002/bse.3168
Mayasari, R., Febriantoko, J., & Masnila, N. (2023). PENGANTAR AKUNTANSI-Sebuah Pengantar Pembelajaran Akuntansi. Penerbit Andi.
Miao, W., Wang, Y., & Wen, S. (2024). ESG performance and green innovation in new energy enterprises: Does institutional environment matter? Research in International Business and Finance, 71. https://doi.org/https://doi.org/10.1016/j.ribaf.2024.102495
Paridhi, & Ritika. (2025). Impact of ESG Disclosures on Corporate Financial Performance: An Industry?Specific Analysis of Indian Firms. Business Strategy & Development, 8(1), e70055.
Sulimany, H. G. H. (2023). Ownership structure and audit report lag of Saudi listed firms: A dynamic panel analysis. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2229105
Thai, K. H. P., & Birt, J. (2020). Do Risk Disclosures Relating to the Use of Financial Instruments Matter? Evidence from the Australian Metals and Mining Sector. International Journal of Accounting, 54(4). https://doi.org/https://doi.org/10.1142/S1094406019500173
Thrikawala, S., Locke, S., & Reddy, K. (2017). Dynamic endogeneity and corporate governance-performance relationship: Lessons from the microfinance sector. Journal of Economic Studies, 44(5), 727–744.
Tsang, A., Frost, T., & Cao, H. (2023). Environmental, Social, and Governance (ESG) disclosure: A literature review. The British Accounting Review, 55(1). https://doi.org/https://doi.org/10.1016/j.bar.2022.101149
Useche, A. J., MartÃÂnez-Ferrero, J., & Reyes, G. E. (2025). Taking ESG strategies for achieving profits: a dynamic panel data analysis. Journal of Economics, Finance and Administrative Science, 30(59), 61–78.
Vongpatchim, P., & Chainirun, P. (2025). ESG Scores and Financial Growth: A Pathway to Corporate Sustainability. International Journal of Economics and Financial Issues, 15(4), 1.
Wintoki, M. B., Linck, J. S., & Netter, J. M. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105(3), 581–606.
Wu, Z., Gao, J., Luo, C., Xu, H., & Shi, G. (2024). How does boardroom diversity influence the relationship between ESG and firm financial performance? International Review of Economics & Finance, 89, 713–730. https://doi.org/https://doi.org/10.1016/j.iref.2023.10.045
Xu, H., Xu, X., & Junli. (2021). The Impact of Mandatory CSR Disclosure on the Cost of Debt Financing: Evidence from China. Emerging Markets Finance and Trade, 57, 2191–2205. https://doi.org/https://doi.org/10.1080/1540496X.2019.1657401
Xu, Y., Wang, S., Wang, T., Fan, Q., & Wong, M. C. S. (2025). ESG Ratings, Agency Cost and Corporate Performance: The Case of Chinese Firms in 2009-2023. Sustainable Futures, 10, 101148.
Yan, H., Mishra, A. K., & Zhou, X. (2025). Do All Food and Beverage Firms Benefit From Voluntary ESG Reporting? Evidence From China’s Listed Companies. Agribusiness.
Zahid, R. M. A., Saleem, A., Maqsood, U. S., & Sági, J. (2024). Moderating role of audit quality in ESG performance and capital financing dynamics: insights in China. Environment, Development and Sustainability, 26(5), 12031–12060. https://doi.org/10.1007/s10668-023-03636-9
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Riana Mayasari, Sulaiman, Indra Satriawan
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
