Stock Volatility and ESG Factors: A Study on Merah Putih Cabinet’s First Semester of Sustainable Economy

Daniyal Ulyana (), Ferriyanto Ferriyanto, Reniati Reniati and Aning Kesuma Putri
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Daniyal Ulyana: Universitas Bangka Belitung, Faculty of Economics and Business
Ferriyanto Ferriyanto: Universitas Bangka Belitung, Faculty of Economics and Business
Reniati Reniati: Universitas Bangka Belitung, Faculty of Economics and Business
Aning Kesuma Putri: Universitas Bangka Belitung, Faculty of Economics and Business

A chapter in Proceedings of the 2nd International Conference of Economics, Management, Accounting, and Business Digital (ICEMAB 2025), 2025, pp 171-178 from Springer

Abstract: Abstract This study aims to analyze the impact of Environmental, Social, and Governance (ESG) performance on the stock volatility of companies operating in Indonesia’s blue and green economy sectors. Using a quantitative approach, the study employs a Multivariate Regression Model to assess how ESG factors influence stock volatility. Data were analyzed using Ordinary Least Squares (OLS) regression in a Multivariate Regression framework, employing the classical assumption tests (normality, multicollinearity, heteroskedasticity) prior to estimation. The findings reveal that governance risk significantly affects stock volatility, while environmental and social risks do not have a substantial impact. Additionally, the interaction between social and governance risks contributes to increased stock volatility, highlighting the importance of strong governance structures in mitigating market fluctuations. The results suggest that enhancing ESG practices, particularly governance, can improve stock stability in the blue and green economy sectors, contributing to the long-term sustainability of these industries.

Keywords: ESG; Stock Volatility; Blue Economy; Green Economy; Governance Risk (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-974-2_25

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DOI: 10.2991/978-94-6463-974-2_25

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