Does ESG Performance Affect Financial Performance? Evidence from Indonesia

Economic, social, and environmental issues are currently becoming major worldwide issues. Geopolitical, economic power streams have focused on ESG goals, encouraging companies, investors, governments to apply them every aspect of business. The current constraint is that Indonesian business stakeholders still typically short-term profits, which intended transform towards long-term sustainability. This study examines the effect performance corporate financial performance. primary analysis tool in this uses panel data regression with Random Effect Regression Model. sample was selected from 23 companies listed Indonesia Stock Exchange, an observation period 2018–2020. results indicate its sub-dimensions has a positive accounting-based as measured using ROA. However, market-based proxy Tobin's Q, not been able influence Some important reasons involved environmental, governance activities create competitive advantage, reduce company risk, improve market performance, enhance company's sustainable development capabilities.