The Effect of ESG Adoption and CSR Disclosure on Financial Performance of Indonesian Listed Banks
Keywords:
ESG, CSR, Financial Performance, Banking Indonesia Stock Exchange, Digital TransformationAbstract
This study aims to analyze the influence of Environmental, Social, and Governance (ESG) adoption and Corporate Social Responsibility (CSR) disclosure on the financial performance of banks listed on the Indonesia Stock Exchange (IDX/BEI). Through a library research approach, this study synthesizes findings from three main sources a study on the effect of profitability on firm value with ESG as a moderating variable in ASEAN-6 companies, an analysis of the effect of ESG on financial performance with digital transformation as a moderating variable; and a study on the effect of CSR disclosure on the financial performance of banks listed on the BEI. The synthesis results indicate that ESG adoption has a positive and significant effect on financial performance, particularly when supported by advanced digital transformation. In contrast, CSR disclosure in the BEI banking sector showed no significant effect, indicating that Indonesian investors remain short-term oriented. This study concludes that the integration of ESG in banking corporate strategy, strengthened by digital technology, is key to sustainable financial performance improvement.
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