Market Response to Green Investment Alternative in Indonesia: Readiness for Global Sustainability Standards

This research examines how the Indonesian capital market reacts to announcements of the ESG Leaders Index as a green investment indicator. It assesses the market's readiness to adapt to upcoming international sustainability reporting standards, such as IFRS S1 and S2. Using an event study approach, the study analyzes market reactions before, during, and after these announcements. The findings reveal that some companies, particularly in the property and energy sectors, experience significant early responses during the anticipation period, while others show delayed reactions in the adjustment phase. A key novelty of this research is its focus on Indonesia's market readiness for global sustainability standards. This area has been less explored in previous studies focused on developed markets. By incorporating both anticipation and adjustment periods, this study provides a more comprehensive understanding of how investors process ESG information in a developing market context.