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This study aims to determine the influence of environmental responsibility, social responsibility, and governance practice disclosures on the financial performance of non-financial companies listed on the Indonesia Stock Exchange from 2012 to 2021. It employs moderated regression analysis and sub-group regression to explain the relationships between the variables. The results suggest a surprising finding that the indicators of environmental responsibility and governance disclosure practices lead to a decline in corporate financial performance, while the social responsibility indicator does not significantly affect corporate financial performance. Expenditures resulting from ESG practices can be perceived as a misuse of corporate resources, a missed opportunity, or, alternatively, as an overinvestment. However, the decline in performance due to environmental responsibility disclosure and governance practices can be mitigated by companies that engage in internationalisation. To sustain environmental, social, and governance activities over the long term, managers are required to deliver consistently increasing and higher financial performance.
Soesetio et al. (Fri,) studied this question.