ESG Risk and Firm Value

Abstract

Good performance can help companies achieve their goals of making a profit and providing welfare for shareholders. Stock returns are one indication of a company's market performance (value of the firm), which can increase investment from investors. In addition to analyzing financial performance and market performance, shareholders can also analyze non-financial information to increase investor interest. One of the financial information is ESG (Environment Social and Governance) which was then followed up by the IDX by launching IDX ESG Leaders in 2020, through ESG Risk. The better the company's environmental and social performance, the lower the ESG risk. This study aims to assess company performance and its relationship to ESG Risk, in line with the Indonesian government's determination to reduce carbon emissions to zero percent by 2050. This is an agreement with countries in the world in the Kyoto Protocol. Various efforts by the Indonesian government to meet these demands, through ESG Disclosure, carbon tax and Economic Value of Carbon.