HERSUGONDO, Hersugondo (2026) ARTIKEL Dr. HERSUGONDO, SE, MM: DOES ESG DISCLOSURE MATTER FOR FINANCIAL PERFORMANCE? THE ROLE OF FIRM AGE3. Economic Studies (Ikonomicheski Izsledvania),, 35 (3). pp. 106-127.

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Abstract

Corporate sustainability has become an increasingly important global issue, including
in developing countries such as Indonesia, alongside growing investor and stakeholder
awareness of Environmental, Social, and Governance (ESG) practices. This study
examines the effect of ESG disclosure on the financial performance of non-financial
firms listed on the Indonesia Stock Exchange (IDX) during the 2020-2023 period. ESG
data are obtained from Bloomberg Terminal, while financial performance is measured
using Return On Assets (ROA) and Return On Equity (ROE). Firm size and leverage
are included as control variables. Using a quantitative approach with multiple linear
regression and purposive sampling, the final sample consists of 44 firms with consistent
ESG and financial data throughout the observation period. The results show that ESG
disclosure has a positive and statistically significant effect on ROA and ROE in the
baseline model. After controlling for firm size and leverage, the positive effect on ROA
remains significant, whereas the effect on ROE becomes marginally significant.
Further analysis indicates that firm age moderates the relationship between ESG
disclosure and financial performance, exhibiting a marginal effect on ROA and a
statistically significant effect on ROE. These findings support the relevance of
signalling theory, stakeholder theory, agency theory, legitimacy theory, and
institutional theory within emerging market contexts. Overall, the study contributes to
the ESG literature in Indonesia and provides practical insights for managers and
policymakers in promoting more transparent and comprehensive sustainability
reporting.

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