The Role of ESG Disclosure and Sustainability Reporting in Increasing Company Value (Empirical Study: Food and Beverage Companies Listed on the Indonesia Stock Exchange 2021-2024)

Abstract

This study aims to analyze the effect of ESG Disclosure and Sustainability Reporting on firm value, with firm size as a control variable, in manufacturing companies in the food and beverage sub-sector listed on the Indonesia Stock Exchange during the period 2021–2024. The ESG variable is measured using the Global Reporting Initiative (GRI) standards, while Sustainability Reporting is measured using a dummy variable. This study employs a quantitative approach using secondary data and panel data regression analysis conducted through EViews 13 software. The sample was determined using purposive sampling, resulting in 19 companies observed over four years, yielding a total of 76 observations. The results indicate that ESG Disclosure has a significant effect on firm value. Sustainability Reporting, however, does not have a significant effect on firm value. In addition, firm size as a control variable shows a significant effect on firm value. These findings suggest that in the context of an emerging market, increased ESG disclosure and sustainability reporting do not necessarily lead to an immediate increase in firm value. Market responses may be influenced by perceptions regarding costs, the effectiveness of implementation, and the level of integration of sustainability practices into the company’s core business strategy. This study is expected to provide implications for management to not only enhance the quantity of ESG and sustainability disclosures but also to improve their quality, consistency, and strategic integration in order to create long-term value for the company.