The Influence of ESG on Price to Book Value

Abstract

Objective; to analyze the influence of Environmental, Social, and Governance (ESG) on Price to Book Value (PBV). Method; using multiple linear regression to test the partial and simultaneous influence of these variables on PBV. Research results; Show that partially, the Environmental Pillar Score, Social Pillar Score, Governance Pillar Score, and ESG Combination Score have a significant positive influence on PBV. The results of the simultaneous analysis also show that the Environmental Pillar Score, Social Pillar Score, Governance Pillar Score, and ESG Combination Score together have a positive effect on PBV. Implications; research results on the importance of implementing ESG practices in increasing company value for the investors. The research results can be a reference for policymakers and practitioners in designing and implementing sustainable strategies that can increase company value. Limitations; the data used is limited to the 2013-2023 period and the ASEAN region, so the results may not be generalizable to a wider context. This research does not consider the possibility of mediating or moderating variables that could influence the relationship between ESG and PBV. This research does not take into account other external factors such as macroeconomic conditions which can influence a company's financial performance. Further research is recommended to overcome these limitations by expanding the data coverage, using more complex analysis methods, and considering other external factors.