The Effect of ESG Disclosure on Firm Value: The Moderating Role of The Reporting Format

Awaliyatu Khoirunnisa, Dwi Putri Restuti

Abstract


This study examines the effect of Environmental, Social, and Governance (ESG) disclosure on firm value by incorporating reporting format as a moderating variable. This study uses a quantitative approach to investigate mining companies listed on the Indonesia Sharia Stock Index (ISSI) from 2020 to 2024. The analysis in this study employs a Moderated Regression Analysis (MRA) approach, which is used to assess the direct effect of ESG disclosure on company value, considering the moderation of the reporting format. The results indicate that ESG disclosure has a positive and statistically significant impact on firm value. The Reporting Format can moderate the relationship between ESG and company value and the relationship between ESG Disclosure and Firm Value remains significant and positive. Theoretically, this study highlights that the reporting format influences market perception, while practically, it supports regulators in strengthening the quality of sustainability reporting.

 


Full Text:

PDF

References


Aboud, A., & Diab, A. (2018). The impact of social, environmental and corporate governance disclosures on firm value: Evidence from Egypt. Journal of Accounting in Emerging Economies, 8(4), 442–458. https://doi.org/https://doi.org/10.1108/JAEE-08-2017-0079

Adhia, LL, & Paramita, VS (2025). The Effect of Environmental Social Governance (ESG) Disclosure on Firm Value with Profitability and Firm Size as Moderating Variables. Moneta: Journal of Economics and Finance, 3(1), 1–18. https://doi.org/10.61978/moneta.v3i1.444

Aditya, M., & Hasnawati, S. (2025). The effect of ESG disclosure on firm value: Empirical study on companies listed in the IDX ESG Leader Index for the period 2021–2023. International Journal of Education, Social Studies, and Management (IJESSM), 5(2), 614–627.

Alsayegh, M.F., Rahman, R.A., & Homayoun, S. (2020). Corporate Economic, Environmental, and Social Sustainability Performance Transformation through ESG Disclosure. Sustainability, 12(9), 3910. https://doi.org/https://doi.org/10.3390/su12093910

Areta, X., & Rahman, A. (2023). The effect of ESG performance on firm value with firm life cycle as a moderating factor: Evidence from Indonesia. Journal of Business Accounting, 22(1), 45–61.

Barth, M.E., Beaver, W.H., & Landsman, W.R. (2001). The relevance of the value relevance literature for financial accounting standard setting: Another view. Journal of Accounting and Economics, 31(1), 77–104. https://doi.org/https://doi.org/10.1016/S0165-4101(01)00019-2

Bosi, M.K., Lajuni, N., Wellfren, A.C., & Lim, T.S. (2022). Sustainability Reporting through Environmental, Social, and Governance: A Bibliometric Review. Sustainability, 14(19), 12071. https://doi.org/https://doi.org/10.3390/su141912071

Connelly, B.L., Certo, S.T., Ireland, R.D., & Reutzel, C.R. (2011). Signaling theory: A review and assessment. Journal of Management, 37(1), 39–67. https://doi.org/https://doi.org/10.1177/0149206310388419

Eccles, R. G., & Krzus, M. P. (2018). The Nordic model: Sustainability and integrated reporting. Routledge.

Ellili, N.O.D. (2022). Bibliometric analysis and systematic review of environmental, social, and governance disclosure papers: current topics and recommendations for future research. Environmental Research Communications, 4(9). https://doi.org/10.1088/2515-7620/ac8b67

Fadly, MR (2024). Integrating Environmental, Social, and Governance (ESG) Principles into Sustainability Business Law: A Legal Perspective on Corporate Governance and Environmental Accountability in Indonesia. Literate: International Journal of Social Science and Humanities, 3(1).

Febriantoko, J., Sari, KR, & Armaini, R. (2025). The role of ESG disclosure in increasing firm value and financial performance in the Indonesian hospitality sector: Moderation of firm size and age. Owner: Research and Accounting Journal, 9(2), 1033–1048.

Francis, J., & Schipper, K. (1999). Have financial statements lost their relevance? Journal of Accounting Research, 37(2), 319–352. https://doi.org/https://doi.org/10.2307/2491412

Gerged, A. M., Salem, R., & Beddewela, E. (2022). How does transparency into global sustainability initiatives influence firm value? Insights from Anglo-American countries. Business Strategy and The Environment, 32(7), 4519–4547. https://doi.org/https://doi.org/10.1002/bse.3379

Hariyanto, DB, & Ghozali, I. (2024). The Influence of Environmental, Social, Governance (ESG) Disclosure on Company Value. Diponegoro Journal of Accounting, 13, 1–13. https://ejournal3.undip.ac.id/index.php/accounting/article/view/46057%0A

Huang, DZ-X. (2021). Environmental, social and governance factors and assessing firm value: valuation, signaling and stakeholder perspectives. Accounting & Finance, 62(1), 1983–2010. https://doi.org/https://doi.org/10.1111/acfi.12849

Indrawati, N., L, AA, . R., & Mutia Basri, Y. (2023). The Effect of Intellectual Capital and Corporate Governance on Company Performance and its Impact on Firm Value. KnE Social Sciences, 2023, 217–232. https://doi.org/10.18502/kss.v8i13.13759

Khan, M., Serafeim, G., & Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697–1724. https://doi.org/https://doi.org/10.2308/accr-51383

Kotsantonis, S., Pinney, C., & Serafeim, G. (2016). ESG integration in investment management: Myths and realities. Journal of Applied Corporate Finance, 28(2), 10–16. https://doi.org/https://doi.org/10.1111/jacf.12169

Lagasio, V., & Cucari, N. (2019). Corporate governance and environmental social governance disclosure: A meta-analytical review. Corporate Social Responsibility and Environmental Management, 26(4), 701–711. https://doi.org/https://doi.org/10.1002/csr.1716

Li, Y., Gong, M., Zhang, X. Y., & Koh, L. (2023). ESG disclosure and firm value: The moderating role of corporate governance. Journal of Business Ethics, 185(3), 593–610. https://doi.org/https://doi.org/10.1007/s10551-022-05204-2

M. Fakhriansyah, Devia Septyani, & KM Faisal Reza. (2025). The Effect of ESG Disclosure on Company Value. Journal of Economics, Management, Accounting and Finance, 6(1), 1–6. https://doi.org/10.53697/emak.v6i1.2257

OJK. (2017). POJK No. 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies. Financial Services Authority.

OJK. (2021). OJK Circular Letter No. 16/SE OJK.04/2021 concerning the Form and Content of Annual Reports of Issuers or Public Companies. Financial Services Authority.

OJK. (2025). Strengthening ESG Data Transparency, IDX Launches ESG Reporting for Listed Companies. Financial Services Authority.

Oncioiu, I., Popescu, D.-M., Aviana, A.E.,Șerban, A., Rotaru, F., Petrescu, M., & Marin-Pantelescu, A. (2020). Global and domestic investors are demanding greater transparency regarding how companies manage their environmental, social and sustainable governance impacts. Sustainability, 12(17), 6757. https://doi.org/https://doi.org/10.3390/su12176757

Orazalin, N., & Mahmood, M. (2020). Determinants of GRI-based sustainability reporting: evidence from an emerging economy. Journal of Accounting in Emerging Economies, 10(1), 140–164. https://doi.org/10.1108/JAEE-12-2018-0137

Oware, K. M. (2023). Sustainability disclosure, report format and firm performance: Evidence from emerging markets. Journal of Cleaner Production, 403, 136832. https://doi.org/https://doi.org/10.1016/j.jclepro.2023.136832

Pramesti, W.C., Sudarma, M., & Ghofar, A. (2024). Environmental, Social, and Governance (ESG) Disclosure, Intellectual Capital, and Firm Value: The Moderating Role of Financial Performance. Journal of Accounting and Finance Reviews, 14(1), 103–121. https://doi.org/10.22219/jrak.v14i1.32849

Romero, S., Ruiz, S., & Fernandez-Feijoo, B. (2019). Sustainability reporting and stakeholder engagement in Spain: Different instruments, different qualities. Business Strategy and the Environment, 28(1), 221–232. https://doi.org/10.1002/bse.2251

Rossi, P., Nicolò, G., & Caputo, F. (2023). The moderating role of non-financial reporting format on ESG disclosure and forecast accuracy. Journal of Environmental Management, 345, 118891. https://doi.org/https://doi.org/10.1016/j.jenvman.2023.118891

Schipper, K. (2020). Financial reporting relevance in a digital world. Accounting Horizons, 34(4), 23–37. https://doi.org/https://doi.org/10.2308/acch-2020-019

Senadheera, S.S., Gregory, R., Rinklebe, J., Farrukh, M., Rhee, J.H., & Ok, YS (2022). The development of research on environmental, social, and governance (ESG): A bibliometric analysis. An International Journal of Environmental Health and Sustainability, 8(1), 1–15. https://doi.org/https://doi.org/10.1080/27658511.2022.2125869

Sharma, P., Panday, P., & Dangwal, R. C. (2020). Determinants of environmental, social and corporate governance (ESG) disclosure: a study of Indian companies. International Journal of Disclosure and Governance, 17(2), 208–217.

Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/https://doi.org/10.2307/1882010

Susilowati, PIM, Nordiansyah, M., Amiruddin, A., & Darmawati, D. (2025). Examining the relationship between ESG disclosure, financial performance, and company value. Amkop Management Accounting Review (AMAR), 5(1), 105–115.

Yu, EP, Guo, CQ, & Luu, B. Van. (2018). Environmental, social and governance transparency and firm value. Business Strategy and The Environment, 27(7), 987–1004. https://doi.org/https://doi.org/10.1002/bse.2047




DOI: http://dx.doi.org/10.21043/aktsar.v8i2.34321

Refbacks

  • There are currently no refbacks.


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