THE EFFECT OF ENVIRONMENTAL SOCIAL GOVERNANCE ON FINANCIAL PERFORMANCE WITH THE COST OF CAPITAL AS AN INTERVENING VARIABLE

Authors

  • Bernadus Erwin Bagastian Widyo Nugroho Universitas Sultan Ageng Tirtayasa
  • Windu Mulyasari Universitas Sultan Ageng Tirtayasa

DOI:

https://doi.org/10.56548/msr.v4i1.142

Keywords:

ESG Disclosure, Financial Perfomance, Cost of Capital

Abstract

This study aims to determine the effect of ESG on financial performance with the cost of capital as an
intervening variable. The intervening variable in this study is the cost of capital as measured by the
weighted average cost of capital (WACC) based on the company's annual report. The independent
variable in this study is Environmental Social Government (ESG) as measured using Thomson Reuters
Eikon. The dependent variable in this study is financial performance as measured by Return Of Asset
(ROA). The population of this study in manufacturing and real estate sector companies listed on the
Indonesia Stock Exchange (IDX) for the2019-2022 period. The sampling technique used in this method
is purposive sampling with a total sample of 156 data. The data analysis method in this study
uses multiple regression analysis with STATA 17 and path analysis with the help of an online sobel
calculator. The results of this study indicate that ESG disclosure has a positive effect on financial
performance, environmental disclosure has no significant positive effect on financial performance,
social disclosure has no significant positive effect on financial performance, andgovernance disclosure
has no significant positive effect on financial performance.In addition, the cost of capital is unable to act
as a mediator in the effect of ESG on financial performance.

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Published

2025-02-05

How to Cite

Widyo Nugroho, B. E. B., & Mulyasari, W. . (2025). THE EFFECT OF ENVIRONMENTAL SOCIAL GOVERNANCE ON FINANCIAL PERFORMANCE WITH THE COST OF CAPITAL AS AN INTERVENING VARIABLE. Management Science Research Journal, 4(1), 27–34. https://doi.org/10.56548/msr.v4i1.142

Issue

Vol. 4 No. 1 (2025): February 2025

Section

Articles

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Copyright (c) 2025 Bernadus Erwin Bagastian Widyo Nugroho, Windu Mulyasari

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