The Impact of ESG on The Financial, Operational, and Value Performance of Materials Sector Company in Asia Pacific from 2019 to 2023

Lillianna Ricarda Mettasari () and Dewi Hanggraeni ()
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Lillianna Ricarda Mettasari: Universitas Indonesia, Faculty of Economics and Business
Dewi Hanggraeni: Universitas Indonesia, Universitas Pertamina, Faculty of Economics and Business

A chapter in Proceedings of the International Conference on Contemporary Risk Studies (ICONIC-RS 2025), 2026, pp 24-37 from Springer

Abstract: Abstract This study analyzes the impact of Environmental, Social, and Governance (ESG) factors on the financial, operational, and market value performance of materials sector companies in the Asia Pacific region during 2019-2023. Using a quantitative approach with panel data from 128 purposively selected firms, a fixed effect model is applied to assess the influence of overall ESG scores and each pillar on Return on Assets (ROA), Return on Equity (ROE), Tobin’s Q, and Price to Earnings (PE) ratio. The results show that overall ESG scores have a significant negative impact on ROA, ROE, and Tobin’s Q, while the effect on PE is positive but not significant. The environmental pillar shows a consistent negative effect, whereas social and governance pillars have no significant influence. These findings suggest a short-term tradeoff between sustainability efforts and firm performance, and indicate that ESG is not yet fully valued by investors in this sector.

Keywords: ESG disclosure; Operational Performance; Financial Performance; Market Value; Asia Pacific (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-2-38476-595-9_3

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DOI: 10.2991/978-2-38476-595-9_3

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