ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) METRICS UNDER SELECTED INDUSTRIES A COMPARATIVE STUDY: IN ASIA PACIFIC COMPANIES

• Main Author: Mey Lina N, Devy
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/69073
• Institution: Institut Teknologi Bandung

Sustainable finance build in a large formation of environmental, social, and governance (ESG) principles that are becoming increasingly important for borrowers and investors. The issue of ESG have material impact on corporate performance and risk profile, and on the stability of the financial system. The policy-makers rules are mandatory in developing standards, fostering disclosure and transparency, and promoting integration of sustainability considerations into investments and business decisions. Reasons for company investment Environmental, social and governance (ESG) needs to be improved because it can generate substantial direct financial returns. Investors and company managers who agreed to the ESG improvement plan had a substantial impact on the quantifiable total shareholder value. A strong investor base requires their asset managers to incorporate more long-term ESG plans into company valuations and include ESG issues in reports. The company’s stakeholder and shareholder nowadays have to assign these two separate and entirely disconnected information, financial results and impact on environmental, social, and governance (ESG) performance. The company do the screening in or out through several criteria exclude the data into projection of earnings or valuation analysis. This research is trying to identify the companies both public and private in oil and gas, coal, metal mining, automotive, telecommunication, and utilities in Asia Pacific, for their ESG metrics effect on the financial performances, both ROE and ROA. To investigate, among other things, the ESG, ROE, ROA, and stated control variables analyzed to obtain results by using correlation and multiple linear regression tests to know the most significant effect between ESG, ROE, and ROA. Based on the sample selection requirements above, there are 128 companies for the period of 2016-2020. Therefore, there are 640 observations will be studied. Before the data is processed, data have to be checked firstly whether there is any outlier sample or not. In the candidate sample, there are 190 observations that are classified as outliers in the first model and there are 32 observations that are classified as outliers in the second model. There are 61 missing data in the first model and in the second model. In the end, there are 389 samples for first model and 547 for the second model.