The Effect Of ESG On Financial Performance With Intellectual Capital As A Moderating Variable

Abstract

This study aims to analyze the influence of Environmental, Social, and Governance (ESG) on the financial performance of manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2019-2023, as well as the moderating roles of Intellectual Capital. A quantitative approach was employed through secondary data documentation techniques and analyzed using panel data regression with a fixed effects model. The research sample consisted of 22 manufacturing companies. The results show that ESG disclosure has a significant influence on financial performance. Intellectual Capital also has a significant impact and positively moderates the relationship between ESG and financial performance. This research implies the importance of ESG practices and intellectual capital management as strategies to enhance the financial performance of manufacturing companies in Indonesia, particularly by strengthening internal capabilities in leveraging sustainability practices.