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Abstract

The diverse findings regarding the effects of Environmental, Social, and Governance (ESG) principles on performance are prompting the examination of these practices using Sustainability Balanced Scorecard (SBSC) as a Strategic Performance Measurement System (SPMS). Therefore, this study aimed to construct ESG principles model and index by analyzing content from annual and sustainability reports which served as indicators for governance maturity level. ESG principles were further categorized within the Triple I framework, consisting of Sustainability Intention, Integration, and Implementation. The study also used purposive sampling focusing on the best companies using ESG principles in the non-financial sector listed on the Indonesia Stock Exchange including the SRI KEHATI and LQ45 Index from 2017 to 2021 (212 Observations). The findings showed that ESG measures did not impact profitability but positively affect the organization's value. This discovery suggested a dynamic endogeneity, necessitating future exploration of investment efficiency over a minimum of ten years to comprise sustainability and governance adaptation across non-financial sectors in Indonesia and cross-border countries.

Bahasa Abstract

Beragamnya temuan pengaruh praktik ESG terhadap kinerja mendorong para peneliti untuk menganalisis praktik lingkungan, sosial, dan governansi (ESG) menggunakan perspektif sistem pengukuran kinerja strategis Sustainability Balanced Scorecard (SBSC). Penelitian ini mengembangkan Model Praktik ESG dan Indeks Praktik ESG menggunakan analisis konten pengungkapan inisiatif strategis dan pengukurannya kinerjanya dalam laporan tahunan dan laporan keberlanjutan sebagai proksi level maturitas adaptasi strategi dan governansi sektor nonkeuangan di Indonesia. Praktik ESG dikelompokkan atas kerangka “Tiga I” yaitu Intensi, Integrasi dan Implementasi Keberlanjutan. Sampel penelitian adalah perusahaan sektor nonfinansial yang terdaftar di Bursa Efek Indonesia dan termasuk dalam SRI Kehati dan LQ45 Index selama tahun 2017-2021 (212 observasi). Hasil penelitian menunjukkan praktik ESG tidak berpengaruh terhadap profitabilitas, namun berpengaruh positif terhadap nilai perusahaan. Hasil ini menyiratkan adanya endogenitas dinamis yang perlu diuji selanjutnya dengan menyelidiki efisiensi investasi, menggunakan data logitudinal minimal sepuluh tahun untuk mengakomodasi adaptasi strategi dan governansi keberlanjutan pada keseluruhan sektor industri nonkeuangan di Indonesia dan lintas negara.

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