HOW SUSTAINABLE INVESTMENT SHAPES CORPORATE VALUE IN INDONESIAN ENERGY FIRMS
DOI:
https://doi.org/10.5281/zenodo.20507905Keywords:
corporate value, ESG disclosure, financial performance, Indonesian energy firms, sustainable investmentAbstract
Growing demands for sustainable transformation have encouraged companies to adopt responsible investment practices within operational activities. However, existing empirical findings concerning the association between sustainable investment and corporate value remain inconsistent in environmentally sensitive industries. The present research examines how sustainability-oriented expenditures influence corporate performance appraisal among Indonesian energy firms by incorporating ESG disclosure and financial performance as mediating variables. A quantitative explanatory design was employed in this analysis by utilizing secondary information obtained from corporate annual publications and sustainability disclosures of petroleum, natural gas, and coal enterprises traded on the Indonesia Stock Exchange throughout the 2020–2024 period. Based on purposive sampling criteria, 65 firm-year observations from 13 companies were included in the analysis. Multiple regression and path analysis were employed to examine direct and indirect relationships between the variables. The findings reveal that sustainable investment positively affects financial performance and corporate value, whereas its influence on ESG disclosure is statistically insignificant. Financial performance also positively contributes to corporate value and mediates the relationship between sustainable investment and corporate value. In contrast, ESG disclosure does not exhibit a significant mediating effect. These results indicate that investors in Indonesia’s energy sector remain more responsive to profitability and outcomes than to sustainability practices when assessing corporate value.
Downloads
References
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory and practice (14th ed.). South-Western Cengage Learning.
Diantini, N. N. A., Darmayanti, N. P. A., & Candraningrat, I. R. (2023). Green Investing, Environmental Performance, and Firm Valuation: Evidence from Indonesia. Indonesian Journal of Sustainability Accounting and Management, 7(2), 329–343.
Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman.
Jao, R., Hamzah, D., Laba, A. R., & . M. (2020). Financial Performance, Reputation, and Firm Value: Empirical Evidence of Non-financial Companies Listed in Indonesia Stock Exchange. International Journal of Academic Research in Accounting, Finance and Management Sciences, 10(1). https://doi.org/10.6007/IJARAFMS/v10-i1/7007
Keter, C. K. S., Cheboi, J. Y., & Kosgei, D. (2024). Financial performance, intellectual capital disclosure and firm value: the winning edge. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2302468
Larasati, A. R., Arimuljarto, N., & Azhar. (2024). Pengaruh Green Investment dan Kinerja Keuangan terhadap Nilai Perusahaan pada Perusahaan Industri Pertambangan yang Terdaftar di Bursa Efek Indonesia Tahun 2017-2022. Jurnal Manajemen Pratama.
Maharani, A., Agustia, D., & Qomariyah, A. (2024). The Impacts of Green Investment and Firm Value: Exploring from the Mediation Role of Sustainability Performance. https://doi.org/10.21203/rs.3.rs-5243226/v1
Narula, R., Rao, P., & Rao, A. A. (2023). Impact of ESG on firm value: a conceptual review of the literature. Journal of Social and Economic Development, 25(S1), 162–179. https://doi.org/10.1007/s40847-023-00267-8
Obagbuwa, O., & Chummun, B. Z. (2024). Green investment nexus eco-efficiency and firm value: Evidence from top 40 JSE-listed firms. International Journal of Applied Economics, Finance and Accounting, 21(1), 63–75. https://doi.org/10.33094/ijaefa.v21i1.2046
Pardede, S. A. A. A., Rahmawati, C. H. H. T., & Yuniarto, A. Y. (2024). Green Investment on Firm Value. Mediation of Profitability. Grenze International Journal of Engineering and Technology, (June).
Prasetya, F. V., Sri Hastuti, Fahmi Poernamawatie, Mitha Endah Aprillia, & Alvia Intan Magroaini. (2025). Green Competitive Advantage as a Mediator of Green Strategy in Indonesia’s Financial Performance. Jurnal Riset Akuntansi Dan Auditing, 12(2), 31–47. https://doi.org/10.55963/jraa.v12i2.835
Putrika, U., & Ardianto. (2025). How Green Investment Affects Stock Returns: Exploring the Role of Financial Performance. Journal of Accounting Science.
Rusnaeni, N., Gursinda, H., Sasongko, H., Rahman Hakim, D., & Pakuan, U. (2022). Financial Performance, Institutional Ownership, Size, And Firm Value: A Structural Equation Modeling Approach. Business and Accounting Research (IJEBAR) Peer Reviewed-International Journal, 6, 4.
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic Management Journal, 5(2), 171–180. https://doi.org/10.1002/smj.4250050207
Widnyana, I. W., Wiksuana, I. G. B., Artini, L. G. S., & Sedana, I. B. P. (2021). The effect of financial architecture and ownership structure on the financial performance and corporate value, reciprocal relationship between financial performance and corporate value. International Journal of Financial Innovation in Banking, 3(1), 76. https://doi.org/10.1504/IJFIB.2021.114960
Ye, J., & Dela, E. (2023). The Effect of Green Investment and Green Financing on Sustainable Business Performance of Foreign Chemical Industries Operating in Indonesia: The Mediating Role of Corporate Social Responsibility. Sustainability, 15(14), 11218. https://doi.org/10.3390/su151411218
Yulianti, S., & Ramli, R. (2025). Pengaruh Green Investment dan Corporate Social Responsibility terhadap Financial Performance yang dimoderasi oleh Ownership Concentration (Studi Pada Perusahaan Indeks SRI-KEHATI yang terdaftar di BEI Periode 2019-2023). Jurnal Administrasi Bisnis, 15(1).
Zheng, Y. (2026). How market values firms’ green investment: Evidence from mergers and acquisitions in China. Economic Systems, 50(1), 101330. https://doi.org/10.1016/j.ecosys.2025.101330
Zheng, Y., & Feng, Q. (2024). ESG performance, dual green innovation and corporate value—based on empirical evidence of listed companies in China. Environment, Development and Sustainability, 27(1), 609–624. https://doi.org/10.1007/s10668-024-05394-8
