Issue

Vol. 13 No. 2 (2026): September

Date Log

Submitted
23 May 2026
Accepted
14 August 2026
Published
14 August 2026

Copyright (c) 2026 Fadrul Fadrul, Briyan Cadalora Putra, Priyono Priyono, Ackhriansyah Ahmad Gani (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

From ESG Performance to Firm Value: Examining the Financial Consequences of Strategic Sustainability

https://doi.org/10.24252/minds.v13i2.68366
Fadrul Fadrul
Institut Bisnis & Teknologi Pelita Indonesia, Indonesia
Briyan Cadalora Putra
Universitas Bhayangkara Surabaya, Indonesia
Priyono Priyono
Institut Bisnis & Teknologi Pelita Indonesia, Indonesia
Ackhriansyah Ahmad Gani
Universitas Muslim Indonesia, Indonesia

Corresponding Author(s) : Fadrul Fadrul

[email protected]

Jurnal Minds: Manajemen Ide dan Inspirasi, Vol. 13 No. 2 (2026): September

Abstract

This study examines the effect of Environmental, Social, and Governance (ESG) performance on financial performance and firm value among energy sector firms listed on the Indonesia Stock Exchange during 2021–2024. Using purposive sampling, the study analyzes 264 firm-year observations from 66 companies. ESG functions as the independent variable, financial performance proxied by Return on Assets (ROA) serves as the mediating variable, and firm value proxied by Price to Book Value (PBV) represents the dependent variable. Data were analyzed using PLS-SEM with SmartPLS. The findings indicate that ESG has a negative and insignificant effect on financial performance but a positive and significant effect on firm value. Financial performance also significantly mediates the relationship between ESG and firm value in a negative direction, suggesting that market valuation responds more strongly to ESG legitimacy than to short-term profitability performance.

Keywords

ESG Performance Financial Performance Firm Value Energy Sector PLS-SEM
Fadrul, F., Putra, B. C., Priyono, P., & Gani, A. A. (2026). From ESG Performance to Firm Value: Examining the Financial Consequences of Strategic Sustainability. Jurnal Minds: Manajemen Ide Dan Inspirasi, 13(2), 539–550. https://doi.org/10.24252/minds.v13i2.68366
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
References
  1. Al-Chalid, J. Z., & Septiani, D. (2024). Kinerja Keuangan Korporasi dan Faktor ESG: Studi Empiris pada Sektor Energi Indonesia [Corporate financial performance and ESG factors: An empirical study of the Indonesian energy sector]. Media Ekonomi, 24(2), 54–61. https://doi.org/10.30595/medek.v24i2.23687
  2. Alareeni, B. A., & Hamdan, A. (2020). ESG impact on performance of US S&P 500-listed firms. Corporate Governance: The International Journal of Business in Society, 20(7), 1409–1428. https://doi.org/10.1108/CG-06-2020-0258
  3. Brigham, E. F., & Ehrhardt, M. C. (2017). Financial management: Theory and practice (15th ed.). Cengage Learning.
  4. Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management (15th ed.). Cengage Learning.
  5. Brogi, M., & Lagasio, V. (2019). Environmental, social, and governance and company profitability: Are financial intermediaries different? Corporate Social Responsibility and Environmental Management, 26(3), 576–587. https://doi.org/10.1002/csr.1704
  6. Brooks, C., & Oikonomou, I. (2018). The effects of environmental, social and governance disclosures and performance on firm value: A review of the literature in accounting and finance. The British Accounting Review, 50(1), 1–15. https://doi.org/10.1016/j.bar.2017.11.005
  7. Buallay, A. (2019). Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality: An International Journal, 30(1), 98–115. https://doi.org/10.1108/MEQ-12-2017-0149
  8. Deegan, C. M. (2019). Legitimacy theory: Despite its enduring popularity and contribution, time is right for a necessary makeover. Accounting, Auditing & Accountability Journal, 32(8), 2307–2329. https://doi.org/10.1108/AAAJ-08-2018-3638
  9. Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. https://doi.org/10.1287/mnsc.2014.1984
  10. Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal, 38, 45–64. https://doi.org/10.1016/j.gfj.2017.03.001
  11. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing.
  12. Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B., & De Colle, S. (2010). Stakeholder theory: The state of the art. Cambridge University Press.
  13. Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, 5(4), 210–233. https://doi.org/10.1080/20430795.2015.1118917
  14. Ghozali, I., & Latan, H. (2020). Partial least squares: Konsep, teknik dan aplikasi menggunakan program SmartPLS 3.0 [Partial least squares: Concepts, techniques, and applications using SmartPLS 3.0] (3rd ed.). Badan Penerbit Universitas Diponegoro.
  15. Gitman, L. J., & Zutter, C. J. (2015). Principles of managerial finance (14th ed.). Pearson Education.
  16. Global Reporting Initiative. (2021). GRI sustainability reporting standards. GRI.
  17. Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2021). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Sage Publications.
  18. Jeanice, J., & Kim, S. S. (2023). Pengaruh Penerapan ESG Terhadap Nilai Perusahaan di Indonesia [The effect of ESG implementation on firm value in Indonesia]. Owner, 7(2), 1646–1653. https://doi.org/10.33395/owner.v7i2.1338
  19. Khan, M., Serafeim, G., & Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697–1724. https://doi.org/10.2308/accr-51383
  20. Melinda, A., & Wardhani, R. (2020, June 9). The effect of environmental, social, governance, and controversies on firms’ value: Evidence from Asia. International Symposia in Economic Theory and Econometrics, 147–173. https://doi.org/10.1108/S1571-038620200000027011
  21. Prasetyo, W., & Musmini, L. S. (2025). Pengaruh Environmental, Social, and Governance (ESG) dan Efisiensi Operasional terhadap Kinerja Keuangan Perusahaan Perbankan yang Terdaftar di BEI pada Periode 2020–2023 [The effect of ESG and operational efficiency on the financial performance of banking companies listed on the Indonesia Stock Exchange, 2020–2023]. Jurnal Ilmiah Akuntansi Dan Humanika, 15(2), 326–333. https://doi.org/10.23887/jiah.v15i2.102379
  22. Putu, C. P. I. A., & Devi, S. (2024). Pengaruh Environmental Social Governance (ESG) Score dan Struktur Modal Terhadap Nilai Perusahaan [The effect of ESG score and capital structure on firm value]. JIMAT (Jurnal Ilmiah Mahasiswa Akuntansi) Undiksha, 15(1), 166–173. https://doi.org/10.23887/jimat.v15i01.76346
  23. Romli, R., & Abdurohim, A. (2024). Pengaruh Pengungkapan ESG terhadap Nilai Perusahaan [The effect of ESG disclosure on firm value]. COSTING: Journal of Economic, Business and Accounting, 7(6), 164–179. https://doi.org/10.31539/costing.v7i6.12171
  24. Ross, S. A., Westerfield, R. W., Jordan, B. D., Lim, J., & Tan, R. (2019). Fundamentals of corporate finance (12th ed.). McGraw-Hill Education.
  25. Setiawati, A., & Hidayat, T. (2023). The influence of environmental, social, governance (ESG) disclosures on financial performance. Jurnal Ekonomi, Manajemen Dan Perbankan (Journal of Economics, Management and Banking), 9(3), 225–240. https://doi.org/10.35384/jemp.v9i3.454
  26. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. The Academy of Management Review, 20(3), 571–610. https://doi.org/10.2307/258788
  27. Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169–178. https://doi.org/10.1108/JGR-11-2016-0029
  28. Wangi, G. T., & Aziz, A. (2024). Analisis Pengaruh ESG Disclosure, Likuiditas, Dan Profitabilitas Terhadap Nilai Perusahaan Pada Perusahaan Yang Terdaftar Di Indeks ESG Leaders [An analysis of the effect of ESG disclosure, liquidity, and profitability on firm value among companies listed on the ESG Leaders Index]. Ikraith-Ekonomika, 7(2), 221–230. https://doi.org/10.37817/ikraith-ekonomika.v7i2.3351
  29. Wati, K. S. K., & Werastuti, D. N. S. (2025). Pengaruh Environmental Social and Governance (ESG) Score, Ukuran Perusahaan dan Struktur Modal Terhadap Kinerja Keuangan [The effect of ESG score, firm size, and capital structure on financial performance]. JIMAT (Jurnal Ilmiah Mahasiswa Akuntansi) Undiksha, 16(1), 211–223. https://doi.org/10.23887/jimat.v16i01.93038
  30. Wirajuna, L. W. A., & Handajani, L. (2025). Pengaruh Environmental, Social, Governance (ESG) Disclosure terhadap Kinerja Keuangan Perusahaan [The effect of ESG disclosure on corporate financial performance]. Journal of Economic, Business and Accounting (COSTING), 8(6), 4916–4932. https://doi.org/10.31539/wpypyd51
  31. Xu, J., & Liu, F. (2020). The impact of intellectual capital on firm performance: A modified and extended VAIC model. Journal of Competitiveness, 12(1), 161–176. https://doi.org/10.7441/joc.2020.01.10
Read More

Author Biographies

Fadrul Fadrul, Institut Bisnis & Teknologi Pelita Indonesia

Management Department

Briyan Cadalora Putra, Universitas Bhayangkara Surabaya

Management Department

Priyono Priyono, Institut Bisnis & Teknologi Pelita Indonesia

Management Department

Ackhriansyah Ahmad Gani, Universitas Muslim Indonesia

Management Department

Download
PDF
Statistic
Read Counter : 0 Download : 0

Similar Articles

<< < > >> 

You may also start an advanced similarity search for this article.