The Effect of ESG Disclosure on Firm Value: A Study of Companies Listed on the Indonesian Stock Exchange in the Manufacturing Sector

Dewi Ayu Dyah Ningrum; Salsabila Citra Devi; Ely Siswanto; Subagyo Subagyo

doi:10.55927/fjas.v4i12.511

Authors

Dewi Ayu Dyah Ningrum Universitas Negeri Malang
Salsabila Citra Devi Universitas Negeri Malang
Ely Siswanto Universitas Negeri Malang
Subagyo Subagyo Universitas Negeri Malang

DOI:

https://doi.org/10.55927/fjas.v4i12.511

Keywords:

ESG Disclosure, Firm Value, Manufacturing, Tobin's Q, Indonesia

Abstract

This study aims to analyze the effect of ESG disclosure on firm value in 35 manufacturing companies listed on the Indonesia Stock Exchange in 2024. Using a quantitative method with simple linear regression analysis, the result shows that ESG disclosure does not have a significant effect on firm value (sig. 0.480 > 0.05). The average level of ESG disclosure reached 90.26%, but the average Tobin's Q value of 0.4563 indicates undervaluation. This finding indicates that investors in Indonesian capital market are still more focusing on short-term financial performance indicators than sustainability factors. This study contributes to the ESG literature in emerging capital markets by confirming mixed findings in the relationship between ESG disclosure and firm value.

References

Abni Lahaya, I., & Triadita, D. P. (2024). The Effect of Environmental, Social, and Governance (ESG) Disclosure on Company Value in Manufacturing Companies Listed on the Indonesia Stock Exchange in 2019-2022. INOVASI: Jurnal Ekonomi, Keuangan, Dan Manajemen, 20(4), 780–788.

Agatha, N. A., & Irsad, M. (2021). Pengaruh likuiditas, struktur modal, profitabilitas, kebijakan dividen dan ukuran perusahaan terhadap nilai perusahaan pada perusahaan properti dan real estate yang terdaftar di Bursa Efek Indonesia tahun 2015-2019. Jurnal Ilmiah Akuntansi Dan Humanika, 11(2), 329–339.

Alomair, M., & Metwally, A. B. M. (2025). Does ESG disclosure matter for the tax avoidance–firm value relationship? Evidence from an emerging market. Sustainability (Switzerland), 17(9), 1–20. https://doi.org/10.3390/su17093836.

Ana, S., & Wibowo, D. T. (2025). Nilai perusahaan dalam formula tobin’s q ratio. MUQADDIMAH: Jurnal Ekonomi, Manajemen, Akuntansi Dan Bisnis, 3(1), 126–135.

Ananda, A., & Lisiantara, G. A. (2022). Pengaruh profitabilitas, struktur modal, ukuran perusahaan, likuiditas dan kebijakan dividen terhadap nilai perusahaan sektor pertambangan yang terdaftar di BEI periode 2017-2021. Owner: Riset & Jurnal Akuntansi, 6(4), 3974–3987.

Angir, P., & Weli, W. (2024). The influence of environmental, social, and governance (ESG) disclosure on firm value: An asymmetric information perspective in Indonesian Listed Companies. Binus Business Review, 15(1), 29–40. https://doi.org/10.21512/bbr.v15i1.10460.

Chung, K. H., & Pruitt, S. W. (1994). A simple approximation of tobin’s q.

Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any asset. John Wiley & Sons.

Desai, R. (2024). Analysing the Firm Value Effects of Environmental, Social and Governance Disclosure: Empirical Study of Indian Firms. NMIMS Management Review, 32(1), 58–67. https://doi.org/10.1177/09711023241264679.

Dorothy, P., & Endri, E. (2024). Environmental, social and governance disclosure and firm value in the energy sector: The moderating role of profitability. Problems and Perspectives in Management, 22(4), 588–599.

Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal, 38, 45–64.

Hutauruk, J. R., Rahmiati, & Mentari, T. (2025). Analysis of ESG Disclosure on the Firm Value in Banking Sector IDX. INVOICE Jurnal Akuntansi, 7(01), 100–110.

Li, L., Mohamed Saat, M., & Jiayi, W. (2024). The Effect of ESG Disclosure on Firm Value: An Empirical Evidence from Chinese Listed Companies. International Journal of Academic Research in Business and Social Sciences, 14(1), 1091–1101.

Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. https://doi.org/https://doi.org/10.1016/0304-405X(84)90023-0.

Negara, N. G. P., Ishak, G., & Priambodo, R. E. A. (2024). Impact of ESG Disclosure Score on Firm Value: Empirical Evidence From ESG Listed Company in Indonesia Stock Exchange. European Journal of Business and Management Research, 9(2), 114–118.

Rohendi, H., Ghozali, I., & Ratmono, D. (2024). Environmental, social, and governance (ESG) disclosure and firm value: the role of competitive advantage as a mediator. Cogent Business and Management, 11(1).

Sari, D. P., Fikri, M., Kartika, R., & Tanwattana, N. (2025). Corporate governance, ESG disclosure, and firm value: Empirical evidence from Indonesia. Journal of Corporate Finance Research, 3(2), 42–51.

Serafeim, G., & Yoon, A. (2023). Stock price reactions to ESG news : the role of ESG ratings and disagreement. Review of Accounting Studies (2023), 1500–1530.

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

Suhartini, D., Tjahjadi, B., & Fayanni, Y. (2024). Impact of sustainability reporting and governance on firm value: insights from the Indonesian manufacturing sector. Cogent Business and Management, 11(1).

Wahyudi, U., & Pawestri, H. P. (2006). Implikasi struktur kepemilikan terhadap nilai perusahaan: Dengan keputusan keuangan sebagai variabel intervening. Simposium Nasional Akuntansi 9 Padang, 53, 160.

Wedajo, A. D., Salah, A. A., Bhat, M. A., Iqbal, R., & Khan, S. T. (2024). Analyzing the dynamic relationship between ESG scores and firm value in Chinese listed companies: insights from generalized cross-lagged panel model. Discover Sustainability, 5(1). https://doi.org/10.1007/s43621-024-00546-2.

Yeye, O., & Egbunike, C. F. (2023). Environmental, Social and Governance (ESG) disclosure and firm value of manufacturing firms : The moderating role of profitability. International Journal of Financial, Accounting, and Management (IJFAM), 5(3), 311–322. https://doi.org/https://doi.org/10.35912/ijfam.v5i3.1466.