DETERMINANTS OF SUSTAINABLE BOND YIELD AMONG IDX-LISTED COMPANIES

• Main Author: Diandra Andi, Angelia
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/82958
• Institution: Institut Teknologi Bandung

In recent years, the role of sustainable finance has grown within financial markets, integrating Environmental, Social, and Governance (ESG) criteria into investment instruments such as bonds, including in Indonesia. Despite this progress, there remains a gap in understanding the specific sustainability factors that influence sustainable bond yields within the Indonesian context. This study aims to analyze the development of sustainable bonds among IDX-listed companies during the post-Covid period of 2022 and identify the factors influencing sustainable bond yields. The research observes 749 sustainable bonds issued by 93 IDX-listed companies. Multiple regression analysis is employed to analyze the relationship between the bond yield as the dependent variable and sustainability factors—Number of Company-Supported SDGs, ESG Risk Ratings, CSR Funds, and GHG Emissions—as independent variables, along with control variables including three bond characteristics (Modified Duration, Issuance Size, Term to Maturity) and eight company characteristics (Board of Commissioners and Directors Diversity, Company Size and Age, ROA, Current Ratio, Industry, State-owned Enterprise Status). The findings reveal positive correlations between the Number of Company-Supported SDGs and ESG Risk Ratings with bond yields, while CSR Funds and GHG Emissions show negative correlations with bond yields, indicating complex relationships between sustainability performance and sustainable bond yields. The study results suggest strategic recommendations for companies, investors, policymakers and regulatory bodies, as well as educational institutions to enhance the effectiveness and appeal of sustainable bonds in Indonesia.