Trend Analysis Of ESG Disclosure On Green Finance Performance In Indonesia, Malaysia & Singapore Exchanges

Abstract

Green Finance in the banking sector is a new issue in the financial world because it is considered capable of increasing economic growth, by conserving natural resources so that economic development continues to be sustainable. This study aims to determine what factors affect financial performance in disclosing ESG items, so that company management can imply the results of this study which are expected to provide direct or indirect benefits for companies in the banking sector. The author collects independent variables related to the research, namely operational performance, financial performance, with firm value as an intervening variable. The population of this study is the banking sector companies listed on the Indonesia, Malaysia and Singapore Stock Exchanges. This study uses quantitative methods with secondary data using multivariate analysis with a structural equation modeling-partial least square (SEM-PLS) approach. The main challenge in implementing green investment is the lack of incentives from the government and stakeholders. This is indicated by the results of the H1 study; H3; H4; H6; H7 has a significant result because it has a p value below 0.05. While H2; H3; H5; H8; H9; H10 has an insignificant result because it has a p value above 0.05. Responding to the challenges of sustainable finance requires policy tools from various relevant ministries and institutions. Suggestions for future researchers are to try to re-examine using other test tools, such as SPSS or eviews.

Bibliometric Foundations: Tracking the Footprint of Green Finance and Financial Institutions in Global Research

“…Additionally, the focus on traditional financial performance metrics may overshadow the importance of green finance in enhancing a bank's financial performance (Chowdhury, 2023). Furthermore, the complexity of integrating green finance practices into existing banking operations and products may deter researchers from exploring this area (Aulia et al, 2023). Overall, these factors contribute to the scarcity of research topics on green finance in banking.…”

Do sustainability practices contribute to the financial performance of banks? An analysis of banks in Southeast Asia

“…Furthermore, ESG disclosure plays a crucial moderating role by mitigating the negative effect of business weaknesses and attenuating the positive effect of strengths (Fatemi et al, 2018). Along these lines, (Aulia et al, 2023) analyzed what factors affect FP in the disclosure of ESG elements in banks in three Asian countries. They found that the main challenge in implementing green investment was lack of incentives from the government and stakeholders.…”