Do Indonesian investors value sustainability: the relationship between sustainability performance and firm value related to natural environment issues


Citation

Verawati Suryaputra, . and Hamfri Djajadikerta, . and Paulina Permatasari, . (2024) Do Indonesian investors value sustainability: the relationship between sustainability performance and firm value related to natural environment issues. Journal of Sustainability Science and Management (Malaysia), 19 (6). pp. 111-126. ISSN 2672-7226

Abstract

The Indonesian government regulates the activities of local companies related to sustainability as regulated in OJK Regulation (POJK) Number 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Services Institutions, Issuers and Public Companies. Sustainable finance is the government’s goal to preserve the environment. The sustainability report prepared by the company shows concern for environmental sustainability and does not carry out excessive exploration of nature. This research examines the effects of sustainability performance on company value after the implications of POJK51. The sustainability performance variable is a variable that describes the company’s commitment to encouraging business sustainability through healthy practices, accountability, information transparency, contribution to economic development, and improving the quality of social life. The three main pillars of corporate sustainability are economic, social and environmental. The research was conducted on companies listed on the LQ45 Index of the Indonesian Stock Exchange. The research results show that sustainability performance does not affect company value. Investors don’t value sustainability. Improving sustainability performance does not benefit company values. Therefore, companies need to understand which sustainability performance best suits the interests of their stakeholders and make extra efforts to inform them so that investors can understand and appreciate sustainability.


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Abstract

The Indonesian government regulates the activities of local companies related to sustainability as regulated in OJK Regulation (POJK) Number 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Services Institutions, Issuers and Public Companies. Sustainable finance is the government’s goal to preserve the environment. The sustainability report prepared by the company shows concern for environmental sustainability and does not carry out excessive exploration of nature. This research examines the effects of sustainability performance on company value after the implications of POJK51. The sustainability performance variable is a variable that describes the company’s commitment to encouraging business sustainability through healthy practices, accountability, information transparency, contribution to economic development, and improving the quality of social life. The three main pillars of corporate sustainability are economic, social and environmental. The research was conducted on companies listed on the LQ45 Index of the Indonesian Stock Exchange. The research results show that sustainability performance does not affect company value. Investors don’t value sustainability. Improving sustainability performance does not benefit company values. Therefore, companies need to understand which sustainability performance best suits the interests of their stakeholders and make extra efforts to inform them so that investors can understand and appreciate sustainability.

Additional Metadata

[error in script]
Item Type: Article
AGROVOC Term: sustainable development
AGROVOC Term: environmental impact
AGROVOC Term: natural environment
AGROVOC Term: sustainability assessment
AGROVOC Term: environmental accounting
AGROVOC Term: companies
AGROVOC Term: value added
Geographical Term: Indonesia
Depositing User: Mr. Khoirul Asrimi Md Nor
Date Deposited: 09 Apr 2025 02:48
Last Modified: 09 Apr 2025 02:48
URI: http://webagris.upm.edu.my/id/eprint/2553

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