The Effect of Environmental, Social, Governance, and Sustainable Growth Rate on Firm Value with Foreign Ownership as a Moderating Variable: Evidence from IDX ESG Leaders

This study investigates the effect of Environmental, Social, and Governance (ESG) disclosures and Sustainable Growth Rate (SGR) on firm value, with foreign ownership as a moderating variable. The research focuses on 10 companies listed in the IDX ESG Leaders index from 2015 to 2023, resulting in 90 panel data observations. Firm value is proxied by the Price-to-Earnings (P/E) ratio, and the analysis employs panel data regression using the Fixed Effect Model (FEM) with heteroskedasticity-robust standard errors. The results show that ESG disclosures (environmental, social, and governance dimensions) and foreign ownership do not have a significant direct effect on firm value, while SGR has a significant negative effect. Furthermore, foreign ownership significantly moderates the relationship between SGR and firm value, but does not moderate the effect of ESG disclosures. These findings suggest that, in the short term, ESG practices are not yet fully recognized by investors in the Indonesian capital market, while growth management remains a critical determinant of firm value. The study contributes to the ESG literature in emerging markets and offers practical recommendations for enhancing sustainability strategies and investor trust.