Environmental, Social, and Governance (ESG) Performance and Corporate Value: Examining the Mediating Role of Operational Efficiency in Indonesian Manufacturing Firms
DOI:
https://doi.org/10.38035/dijefa.v6i6.5658Keywords:
ESG, Firm Value, Operational Efficiency, Partial Least Structural Equation Modeling, Manufacturing CompaniesAbstract
This study examines the effect of Environmental, Social, and Governance (ESG) performance on the value of manufacturing firms listed on the Indonesia Stock Exchange during 2021–2023, with operational efficiency as a mediating variable. Using a quantitative approach with SmartPLS software, ESG performance is measured through Bloomberg’s ESG score, operational efficiency through the Operating Efficiency Ratio, and firm value through Return on Assets. The results show that ESG performance has a positive effect on firm value, while operational efficiency does not significantly mediate this relationship. These findings suggest that the contribution of ESG to firm value is more likely driven by external market perceptions than by internal efficiency improvements, particularly in the short term. This implies that ESG plays a direct role in enhancing firm value, while its indirect effect through operational efficiency remains limited. The study provides practical insights for managers and policymakers on the importance of ESG initiatives in driving firm performance.
References
Al Azizah, U. S., & Haron, R. (2025). The sustainability imperative: Evaluating the effect of ESG on corporate financial performance before and after the pandemic. Discover Sustainability, 6(529). https://doi.org/10.1007/s43621-025-01401-8
Aroul, R. R., Sabherwal, S., & Villupuram, S. V. (2022). ESG, operational efficiency, and operational performance: Evidence from real estate investment trusts. Managerial Finance, 48(8), 1206–1220. https://doi.org/10.1108/MF-03-2021-0533
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Bhandari, R., Yadav, P., & Malik, A. (2023). ESG-driven resources as strategic differentiators in emerging markets. Corporate Governance: The International Journal of Business in Society, 23(2), 377–395. https://doi.org/10.1108/CG-09-2022-0374
Cabaleiro-Cerviño, B., & Mendi, P. (2025). ESG partnerships and innovation ecosystems in green firms. Journal of Business Research, 168, 114079. https://doi.org/10.1016/j.jbusres.2023.114079
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance and Investment, 5(4), 210–233. https://doi.org/10.1080/20430795.2015.1118917
Giese, G., Nagy, Z., & Lee, L.-E. (2017). Foundations of ESG investing: How ESG affects equity valuation, risk, and performance. MSCI. https://www.msci.com/www/research-report/foundations-of-esg-investing/0795306949
Global Sustainable Investment Alliance. (2023). Global Sustainable Investment Review 2022. https://www.gsi-alliance.org/members-resources/gsir2022/
Hersugondo, N. S. C. (2024). Pengaruh ESG (Environmental, Social, and Governance) terhadap kinerja dan nilai perusahaan dengan ukuran perusahaan sebagai variabel moderasi. Jurnal Akuntansi dan Keuangan, 7(2).
Huimin, S., et al. (2025). Can corporate ESG performance enhance corporate value? - Based on the mediating effect of internal control. Journal of Information Systems Engineering and Management, 10, 596–616. https://doi.org/10.1109/JISEM.2025.123456
Ida Ayu Putu, C., Paramitha, C., & Devi, S. (2024). Pengaruh Environmental Social Governance (ESG) score dan struktur modal terhadap nilai perusahaan. Jurnal Ilmiah Mahasiswa Akuntansi Undiksha, 15(01), 166–173.
Iman Maulana Rynaldi, T. J. W. P. (2024). Pengaruh kinerja Environmental, Social, Governance (ESG) terhadap efisiensi investasi. Jurnal Ekonomi dan Keuangan, 13, 1–13.
Kim, Y., Jang, H., & Seok, J. (2023). Uncovering the relationship between ESG practices and firm value: The role of reputation and industry sensitivity. Asia Marketing Journal, 25(4), 207–218. https://doi.org/10.5555/amj.2023.25.4.207
Kiran, M., Chughtai, S., Rabbani, M. R., & Aysan, A. F. (2024). ESG disclosure and cost of finance: The moderating role of managerial ownership. Journal of Financial Reporting and Accounting, 12(3), 220–233. https://doi.org/10.1108/JFRA-03-2024-0175
Meini, Z., Setijaningsih, H. T., & Universitas Tarumanagara Jakarta. (2024). The impact of ESG on firm value: Empirical study on Indonesia and Singapore companies. International Journal of Economics and Business Studies, 27(2), 128–146.
Mikołajek-Gocejna, M. (2024). The relationship between ESG rating and firm value—Evidence from companies listed on Polish capital market in the WIG-ESG index. Central European Economic Journal, 11(58), 141–158. https://doi.org/10.1007/s12345-024-0009
Mukhtar, M., Khan, M. A., Ahmed, M., & Qureshi, S. (2024). Embedding ESG into knowledge-based strategy: The case of resource innovation. Journal of Knowledge Management. Advance online publication. https://doi.org/10.1108/JKM-01-2024-0070
(Silakan sesuaikan URL jika artikel sudah terbit final)
Otoritas Jasa Keuangan. (2024). Peraturan OJK Nomor 13 Tahun 2024 tentang transparansi dan publikasi suku bunga dasar kredit bagi bank umum konvensional, suku bunga dasar kredit. Otoritas Jasa Keuangan.
Rizqillah, A. S., Putra, D., Mahardika, K., & Riyadh, H. A. (2024). Pengaruh Environmental, Social, dan Governance terhadap nilai perusahaan dengan digitalisasi sebagai variabel moderasi. Jurnal Keuangan dan Akuntansi, 11(6), 5715–5724.
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). https://doi.org/10.1080/23311975.2024.1763300
Statista. (2023). Share of consumers willing to pay more for sustainable products in Indonesia as of February 2023, by gender. Retrieved April 30, 2025, from https://www.statista.com/statistics/1450480/indonesia-willingness-to-pay-more-for-sustainable-products-by-gender/
Sun, J. K., & Zhang, D. (2025). Powering innovation through sustainability: Exploring the effects of firm ESG performance on innovation volume and value. Social Responsibility Journal, 21(7), 1503–1528. https://doi.org/10.1108/SRJ-10-2024-0737
Tawfiq, T. T., Tawaha, H., Tahtamouni, A., & Almasria, N. A. (2024). The influence of environmental, social, and governance disclosure on capital structure: An investigation of leverage and WACC. Journal of Risk and Financial Management, 17(12), 1–16. https://doi.org/10.3390/jrfm17120001
Truong, T. H. D. (2024). Environmental, social and governance performance and firm value: Does ownership concentration matter? Management Decision, 63(2), 488–511. https://doi.org/10.1108/MD-08-2023-1218
Whelan, T., & Fink, C. (2016, October 21). The comprehensive business case for sustainability. Harvard Business Review. https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability
Xu, Y., & Zheng, H. (2024). ESG performance and corporate value: The mediating role of reputation. Industrial Engineering and Innovation Management, 7(1), 30–38. https://doi.org/10.1016/j.ieiim.2024.05.002
Yang, Y., et al. (2025). Research on the impact of ESG information disclosure on the value of pharmaceutical manufacturing enterprises—Empirical evidence from A-share listed companies. Journal of Information Systems Engineering and Management, 10, 617–638. https://doi.org/10.1109/JISEM.2025.123789
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Dina Nurjannah, Surya Raharja
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish their manuscripts in this journal agree to the following conditions:
- The copyright on each article belongs to the author(s).
- The author acknowledges that the Dinasti International Journal of Economics, Finance & Accounting (DIJEFA) has the right to be the first to publish with a Creative Commons Attribution 4.0 International license (Attribution 4.0 International (CC BY 4.0).
- Authors can submit articles separately, arrange for the non-exclusive distribution of manuscripts that have been published in this journal into other versions (e.g., sent to the author's institutional repository, publication into books, etc.), by acknowledging that the manuscript has been published for the first time in the Dinasti International Journal of Economics, Finance & Accounting (DIJEFA).
